30 Aug Bankruptcy and Personal Injury Cases in Florida.
As a consumer bankruptcy attorney, I often meet with potential bankruptcy clients who have outstanding medical bills from a personal injury case. These people are on the brink of bankruptcy, their credit reports are getting hammered from all the late bills, and they may not be able to work due to their injuries. So, they inquire about filing bankruptcy. When I tell them how the bankruptcy will disrupt their personal injury cases, they need to make a decision. I always tell the potential client to discuss their financial situation with their personal injury attorney, if they haven’t already done so. The reason is that once a bankruptcy is filed, the client gives up control of the personal injury case.Although I am concerned about the individual’s finances, I am not willing to step on the toes of the personal injury attorney’s case and what could be a settlement for the client. If it is a large case, the client may have a very difficult decision. If it is a small case, the client’s decision is much easier. Once a bankruptcy if filed, the personal injury attorney technically no longer represents the client. The attorney must file an application to be employed as counsel to the Trustee, as the Trustee is the real party in interest. This should happen in both Chapter 7 and Chapter 13.
If and when a settlement offer is made, the client does not have the authority to say yes or no. The Trustee will usually be notified, and then they make a decision is made to bring this matter before the Bankruptcy Judge. The Bankruptcy Judge must approve any and all settlements in personal injury cases. Once the Judge approves the settlement, then the Trustee will disburse the funds accordingly, unless the Court orders otherwise. Usually, the client will only receive monies if all the Creditors are paid in full or, after notice and hearing, the Court orders otherwise.
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