Does Being Bankrupt Affect My Eligibility For Pre-Settlement Funding?

Every year millions of Americans sustain personal injuries that arise because of the negligence of other people. Drivers fail to obey traffic laws and drive while impaired by drugs and alcohol, property owners fail to keep their premises safe and clean, and product designers and manufacturers seem to forget about taking the time required to create safe products.

These injured individuals need compensation for their injuries, and they need it fast. Unfortunately, more often than not, it doesn’t come fast. Instead, their insurance and legal claims move slowly through the system, making their compensation unavailable until several months or even a year or two go by. At the same time, injured victims are unable to make ends meet because their injuries preclude them from work, or they are struggling to keep up with their medical bills on top of their usual bills, or both.

Given the circumstances, some injured individuals will turn to lawsuit funding for help to ease their financial stress. However, if you are wondering if this is the right solution for you and have recently filed bankruptcy or plan to soon, you may have many questions. Read on to learn more.

Bankruptcy and Personal Injury Laws

Anyone in an active bankruptcy must disclose if they were involved in a personal injury claim stemming from an incident that occurred before the date of their bankruptcy filing, as well as how much they anticipate receiving from the claim. If they do not disclose this information, it is considered bankruptcy fraud and can be prosecuted as such.

Under federal bankruptcy laws, a debtor in bankruptcy can exempt, or in other words, keep out of the bankruptcy estate:

  • $25,150 for personal injury except for pain and suffering or pecuniary loss ($23,675 before April 1, 2019). (11 U.S.C. § 522(d)(11)(D).)
  • Compensation for the loss of future earnings you need for support
  • Recovery for the wrongful death of the someone you relied on for support
  • All monies received because you were a crime victim

It’s crucial to understand that approval for settlement funding and the amount we can give you is rooted in how much compensation your lawyer believes you will receive. If you are in an active Chapter 7 or Chapter 13 bankruptcy, your anticipated compensation must be more than what you cannot exempt in bankruptcy.

If all or most of your proceeds from a settlement or court award will be included in the bankruptcy estate, we cannot provide you with a cash advance based on your total anticipated compensation. We can only provide funding on the parts that you will personally receive and be allowed to exempt.

Can I Apply if My Bankruptcy was Discharged?

However, the good news is that if you have received a discharge of either a Chapter 7 or a Chapter 13 bankruptcy, it will make no difference in the amount of compensation you can keep and, therefore, on whether you can receive settlement funding or not.

A discharge means that your bankruptcy is over and that you are no longer under any legal obligation to pay them back. If your personal injury occurs after your bankruptcy or all of your anticipated settlement will be exempted, you can typically keep the money, which means you can apply for a cash advance on your settlement or court award. We will be more likely to approve you for a higher amount if this is the case.

Should I Speak to an Attorney?

We require all of our clients to be represented by an attorney. Our funding team will talk to your attorney about the specific details of your case and your bankruptcy to determine if you meet the qualifications and how much you might be able to receive for lawsuit funding.

If you are filing a personal injury claim and also dealing with an open bankruptcy, you will want to discuss your situation with a personal injury attorney. You will need to know how your bankruptcy could impact your injury claim.

Not Sure How You Will Pay Your Bills After a Personal Injury? USClaims Can Help

Many injured individuals use pre-settlement funding from USClaims as an alternative to filing for bankruptcy. Instead of having a lengthy legal process to deal with the bills you can’t pay, once you are approved, we can send funds to you within 24 hours. You are free to use the funds as you wish to pay your bills or anything else you need to spend it on.

Our funding can also prevent an impact to your credit score and the bill collectors from calling. Get started today. Apply online, or call us at 1-877-USCLAIMS!

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