If you have been in an accident or injured at work, it can all cause financial difficulties. A bankruptcy during your personal injury case can relieve the pressure of harassing creditors and help you focus on your recovery and personal injury case. Federal bankruptcy exemptions allow you to keep all or part of the proceeds of a personal injury case or worker comp claim.
The bankruptcy exemptions allow you to protect property in bankruptcy. The federal bankruptcy exemptions provide three types of protection for your injury claim. In addition, your personal injury attorney will be paid the same as if you had not filed bankruptcy.
The first is a $21,625 exemption for personal injury. This does not include pain and suffering or actual monetary loss. Your bankruptcy attorney and your personal injury attorney can work together to make sure that the damages are structured to protect the full $21,625.
The second is an unlimited exemption for future lost earnings that are necessary to support you or your dependents. This is one of the most important exemptions. If your injury left you unable to work or unable to earn as much as you did in the past, you need to be assured that a bankruptcy won’t leave you without the means to take care of yourself. This is another area where your bankruptcy attorney and personal injury attorney can work together to structure your case and maximize your personal injury recovery while getting a bankruptcy discharge at the same time.
The third exemption is the wildcard exemption. This exemption is an exemption that you can apply to anything. There are two parts to the wildcard exemption. The first part of the exemption allows you to protect up to $1,150. The second part of the exemption allows you to protect up to $10,825 of the unused homestead exemption. So if you do not have any home equity, you can shift the homestead exemption to your injury claim. If you are married and your spouse files bankruptcy, then you can use your spouse’s to protect your personal injury or workman’s compensation claims. This is an important way for a family to protect a future cash award.
If you have a personal injury case or a workman’s compensation claim and you are experiencing debt problems, you should consult a bankruptcy attorney. A bankruptcy attorney and a personal injury attorney can form an important team to protect your interests and financial future.