Legal Question in Bankruptcy in Virginia
bankruptcy and a future monetary settlement
I am deep in debt because of an accident and subsequent illness. I have a lawsuit pending for the last four years. My attorneys tell me we will go to trial in March, however, there is a big question as to whether I will get anything from this litigation. I have gone through all of my retirement money keeping up with my credit card debt and now my credit cards take up more than half of my salary every month. I have a friend who is paying the payment on one of my credit cards, but will be unable to do so much longer. I really need to file bankruptcy now. What is the law concerning someone who files for bankruptcy, but who might get a monetary settlement from a future lawsuit? What are the legal ramifications of filing for bankruptcy so close to the trial date? There are no assurances I will collect anything and I need some relief right away. What is your answer?
2 Answers from Attorneys
Personal Injury and Bankruptcy
In Virginia, all "causes of action for personal injury or wrongful death and the proceeds derived from court award or settlement" are exempt from creditor claims.Accordingly, you can file for bankruptcy either before or after trial, and you can keepthe proceeds rather than turn them over to thetrustee for distribution to your creditors. You should keep the proceeds in a separateaccount and not commingle them with other funds so as to keep them separate and identifiable.
If you have further questions, please feel free to call or e-mail.
Bankruptcy and lawsuit
I read the reply by Dan Press, but your question does not specify that your suit is for personal injury. The normal rule is that assets that you receive within 180 days of the discharge can be brought back into the bankruptcy estate by the trustee for payment of creditors. The cause of action (lawsuit) also would be listed as an asset when filing.If I can be of help, please call the office at 520-7060. I do bankruptcy work in the Richmond area, with an office in Colonial Heights.William B. Bray
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