Articles Tagged with bankruptcy

There is always a risk in personal injury lawsuits that a defendant may file for bankruptcy protection. If successful, a bankruptcy can effectively discharge the defendant from any obligation to pay a monetary judgment owed to the plaintiff. But what about the reverse situation? What happens if the plaintiff files for bankruptcy before the personal injury lawsuit is resolved?

Courtland Properties I, LLC v. Collins

A recent decision from the Georgia Court of Appeals, Courtland Properties I, LLC v. Collins, helps to explain how the law works in this situation. In this case, a man was injured in a slip-and-fall accident at his apartment complex. He subsequently filed a personal injury lawsuit against the apartment’s owner, alleging its negligence in maintaining the property caused the accident.

Winning a personal injury judgment following a car accident does not always guarantee that the victim will actually get paid. There are cases in which a defendant who lacks adequate financial resources will file for protection under federal bankruptcy law. This can delay and in some cases defeat collection of a valid personal injury judgment under Georgia law.

For instance, in a Chapter 7 bankruptcy, the debtor’s non-exempt property is liquidated to pay any creditors to the extent possible. The remaining debts may then be “discharged.” This does not mean that the debt itself is void. Rather, a discharge means that the debtor is no longer legally obligated to repay the debt, and the creditor may take no further collection action against that individual. However, if there are multiple parties liable for a judgment, the bankruptcy of one defendant does not affect the enforceability of the judgment against the other, non-bankrupt defendants.

Flanders v. Jackson

Dealing with personal and health care issues following a car accident is stressful enough. If your financial situation has also deteriorated to the point that you need to file for bankruptcy, you should understand the impact that might have on any personal injury claim arising from your accident. If you are not careful, the bankruptcy may let a negligent defendant escape responsibility for your injuries.

Make Sure to List All Potential Lawsuits

When you file for bankruptcy you must provide the court with a list of all of your known assets. This includes any pending or potential personal injury claims. A claim is considered part of your bankruptcy estate if the cause of action arose prior to filing. In other words, if you are injured in a car accident on January 10 and file for bankruptcy on January 20, any personal injury claim you might have must be listed on your Chapter 7 petition, even if you do not file a personal injury claim until January 30.