April 15, 2019

If you are contemplating or have already filed for bankruptcy protection, it’s important to know how that can affect your Virginia personal injury case. If you are the plaintiff in a personal injury matter and the defendant has filed for or indicated they will file for bankruptcy, it can have a major impact on your case.

Plaintiff Files Bankruptcy

If you are the plaintiff in a personal injury matter and file for bankruptcy in Virginia while the case is pending, you are at risk for losing the right to claim your medical expenses and bills as part of your demand for damages at trial. There are instances where you can lose the right to claim them prior to trial, even if you did not include them as debts in your bankruptcy paperwork. Some bankruptcy proceedings will dismiss all debts, even if you did not specifically list them.

The ability to claim them in your personal injury case may vary based on the court your case is filed in. Some Virginia courts have allowed you to claim bills included in your bankruptcy, while others have issued rulings that says you cannot since you never had to pay them.

Defendant Files Bankruptcy

If the defendant in your lawsuit has filed for bankruptcy and he or she is at fault for the accident, it can definitely impact your case. The important determining factor is whether the bankruptcy is filed while your personal injury case is pending or after it’s concluded.

If he or she files before the personal injury matter is concluded, you will be listed as a creditor and therefore must stop attempts at collecting any money until the bankruptcy matter is concluded. This is something that could take years in some instances.

There is a way to proceed with your case if you agree to only seek recovery through insurance coverage the defendant has. The downside of this is the insurance company no longer has to worry about protecting their insured, so they may offer less money since there is no personal exposure.

If the bankruptcy filing takes place after your personal injury matter is concluded, there is a chance you lose the opportunity to collect any money. The insurance company would pay the amount of a verdict up to the insured’s limits, leaving the defendant on the hook for the remaining amount. If the judgment is for a large amount, it could be discharged in the bankruptcy. There are some situations, like a verdict related to a drunk driving accident, that are not eligible for being discharged.

Retaining a Virginia Attorney

If you have questions regarding bankruptcy filings and personal injury claims, it’s important to speak to a Virginia attorney who has experience in both areas. Please contact the team of Cravens & Noll PC at 804-330-9220. We have five different offices conveniently located in Central and Western Virginia. Our firm represents both individuals and businesses for a variety of legal matters, including personal injury and bankruptcy. Let one of our knowledgeable attorneys help resolve all your legal needs.

4 Locations    |    804-330-9220    |    540-246-0684

Skip to content