How Personal Injury Awards Are Handled In Bankruptcy

Most people are concerned about their physical assets when filing a bankruptcy case. However, it is important to consider your intangible assets too. Many people who are entitled to settlement payments from a car accident or other personal injury matter should discuss their case with a qualified bankruptcy lawyer at Levitt & Slafkes, P.C.. The Federal Bankruptcy Exemptions often do not provide much protection to personal injury settlement payments.  The real protection is provided to lost wages and medical expenses. Section 522(D)(11)(D) of the Bankruptcy Code allows the exemptions of personal injury recovery up to $21,625, except for pain and suffering or for pecuniary loss.  A “wild card” exemption can be claimed if you have no equity in your home (or you do not own a home).  This means is that the way your lawyer has your settlement payment classified may play a huge role in whether or not you get to keep your money. Many states, including New Jersey, have their own set of exemptions that a debtor may choose to claim instead of the federal exemptions. Deciding which set of exemptions to use can be confusing, so you should contact Levitt & Slafkes, P.C. to discuss what options are best for you. If you are interested in learning how filing a bankruptcy case can benefit you, contact Levitt & Slafkes, P.C., at 973-323-2953. You can also reach us by filling out our online form. We represent debtors in Chapter 7, Chapter 13 and Chapter 11 filings. Let us help you get the fresh financial start you need today.