Worker’s Compensation & Personal Injury

When a person is injured at work or outside the job, such as a traffic accident, the typical result is a dramatic decrease in your income due to the inability to work. Any reduction in pay can have a devastating effect on your family’s ability to meet their monthly debt obligations and necessities; the end result being that your family must prioritize who gets paid and who does not get paid. Depending on the length of time you are out of work or receiving some type of disability payments, your family’s house or vehicle can come under the risk of foreclosure or repossession. In some cases, a bankruptcy is the only avenue of relief for your family. The bankruptcy can, in most cases, eliminate certain debts and free up income that can be used to make payments on assets your family requires, such as your home or vehicle.

Worker’s Compensation

In Illinois and Missouri, you can exempt (protect) an entire award (settlement) you may receive in a worker’s compensation lawsuit even if you are filing a Chapter 7 bankruptcy to discharge your debts. However, any medical provider liens on the award prior to filing for bankruptcy are not discharged and must be paid from the award. Additionally, proceeds from a worker’s compensation award do not remain protected after it is used to purchase other property. In a Chapter 13 bankruptcy, the Court will allow you to retain any amount of the settlement or award that is reasonably necessary for your welfare; these are determined on a case by case basis depending on your earning capacity, extent of disability and other relevant factors. Basically, if you have been injured on the job and are having financial difficulties, then you may wish to speak with us to discuss if filing a bankruptcy is right for you and to ensure any future monies you receive are protected to the greatest extent possible.

Personal Injury

In Illinois, you can exempt (protect) up to $15,000 of any personal injury award or settlement that you may receive while filing a Chapter 7 bankruptcy to discharge your debts; however, payment for psychological or emotional injuries are not protected and any medical provider liens on the award are not discharged and must be paid from the award. Unfortunately, the state of Missouri has opted out from allowing debtors to take federal exemptions. Your personal injury award or settlement will not be exempt from bankruptcy if you are filling in Missouri. If you are contemplating filing a bankruptcy and you have any of these circumstances, then you should call our office at your earliest convenience to get the answers you are seeking.

Still Have Questions?

We hope the information above has answered many of your questions, but we also realize that you probably have questions that are related to your specific case. If you have additional questions please call us at (800) 7-BENSON to setup a free bankruptcy consultation.

Important Disclaimer: The information discussed above and throughout this website should not be relied upon to make any decisions without first speaking to a bankruptcy attorney. There are many intricate rules of law governing bankruptcy with many exceptions to the general rules that could change the advice given by an attorney based on the differing facts in each person’s special set of circumstances. THEREFORE, it is important to discuss any information contained in this website with one of our attorneys before taking any action or refraining from taking any action.

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