Can Personal Injury Settlement Affect Bankruptcy?

Personal injury claims return you with a financial settlement that covers your medical expenses, as well as the loss of income. With that said, if you make a claim during your bankruptcy period, the regulations of whether or not you can keep the amount are quite different. If you wish to learn more about the process, refer to the ensuing guide. 

Can you keep the settlement amount during the bankruptcy period?

The legal rule for bankruptcy states that all of the money awarded to you during the bankruptcy period must be paid to the Official Receiver. According to this regulation, the monetary rewards obtained from a plethora of activities, such as winning a lottery, gaining an inheritance or receiving compensation. 

With that said, when it comes to the settlement for personal injury, the rules and regulations are slightly modified. As the money is provided to pay for the injuries, you may be allowed to keep the section of a settlement that is dedicated to the treatment of injuries. 

However, personal injury claims also provide compensation for the loss of income and the loss of future income. In these cases, you are required to schedule a meeting with the insurance company and use personal injury claims Scotland calculator to determine the amount for the injuries and differentiate it from the amount dedicated to the loss of income. The latter amount should be returned to the Official Receiver. 

Can you keep the settlement amount after discharge?

According to the regulations of bankruptcy, you are encouraged to keep the monetary rewards, offered by the compensation claim of an injury after you have been discharged. However, the only way in which you can keep the rewards is that if the injury took place after the period of your discharge.

In the case that the injury took place before the period of discharge, you would not be able  keep the compensation money. In this scenario, the compensation provided for the loss of income is considered as an asset of your bankruptcy estate. Therefore, the money is transferred to your Official Receiver. This case is followed even when the payment is received after the period of discharge is completed. 

You can only keep the compensation amount if the accident took place after the discharge date.  

Should you wait to pursue the claim after the bankruptcy period is over?

Most people are under the impression that pursuing the personal injury claim after the bankruptcy period would allow them to keep the compensation money. However, this idea is completely wrong. You are only allowed to keep the compensation amount in case the injury took place after the period of discharge from bankruptcy. In case the accident took place before the bankruptcy, waiting out to pursue the compensation would not enable you to keep the rewards. 

Any settlement amount awarded for the loss of income would be an asset of your bankruptcy. The main reason being that you had the opportunity to receive compensation while you were bankrupt. Therefore, there are laws that prevent you from accessing the money after the discharge period is over. 

However, if you wait to pursue the claim after the discharge period is over, there is a slight possibility that the settlement money would be rewarded to you. In this case, it is your responsibility to inform the previous Official Receiver. If you fail to inform them, and they gather evidence that you took the money, a legal action can be taken against you. 

How can you pursue a personal injury claim?

In the case your personal injury took place after being discharged from the accounts of Bankruptcy, you can pursue a compensation claim, and keep the money. If your case is approved, the money would be provided as a compensation for your injuries, as well as for the future and current loss of income. In order to receive the maximum amount of settlement, it is imperative to follow the ensuing steps. 

• Schedule a consultation session

The first thing you need to do is to schedule a consultation session with the personal injury solicitor.  When you are on the lookout for a solicitor, make sure to choose a firm that operates under the CFA or the No Win No Fee policy. This way, you can save a large sum of money in legal fees. With the CFA, you do not have to pay your solicitor, until the case decision is made in your  favour. 

• Talk to a solicitor
  During the consultation session, it is essential to gauge the credibility, as well as the experience of the solicitor. Hire a solicitor who has experience in dealing with cases for individuals struggling with bankruptcy. These individuals can guide you proficiently throughout the process.
  
• Provide evidence

In order to increase your chances of getting the case approved, it is essential to gather credible evidence to support the claim. If you have any videos, or image, that proves that the injury resulted from a third party’s negligence, be sure to forward it to your solicitor. If there were any eye witnesses present, collect their personal information to acquire a statement, which could build the credibility of your claim.