How is a personal injury settlement treated in a Chapter 7 bankruptcy?

UPDATED: Sep 8, 2010

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How is a personal injury settlement treated in a Chapter 7 bankruptcy?

I broke my ankle badly at a friend’s home; it required 2 surgeries to correct, as well as months of PT in order to walk without as much pain. This process from injury to “healed” lasted 14 months. When we had to file for bankruptcy. We were told that the trustee would require us to pursue a PI claim since any recovery would be an asset. Am I eligible to receive additional funds for pain and suffering in OR? We understand the first 10K is protected as well. The settlement was for 125K.

Asked on September 8, 2010 under Bankruptcy Law, Oregon


M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

Here is the confusion that I am having: the matter settled.  If it settled then it settled for all outstanding issues. Or do you mean are you entitled to receive funds over and above the $10,000 to which you are entitled under the bankruptcy exemption code?  It is a good thought but the list of exemptions states a flat amount for the PI settlement and does not indicate that you would be able to receive more if the breakdown were differently in the settlement (i.e., lost wages versus pain and suffering).  So unfortunately I think that the answer is no.  I would, though, ask.  It does not ever hurt to ask.  Good luck.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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