An unresolved personal injury claim can pose a potential snag when a consumer considers an individual bankruptcy in Wisconsin. Typically, this may involve a situation where you’ve unfortunately been injured in a car accident and you have an outstanding claim against the other driver for money damages. In fact, it may be unpaid medical bills and lost income as a direct result of the accident, along with other factors, that might push a consumer into Chapter 7 in the first place.

If you do have a claim pending against the responsible party for negligence or another related civil allegation, even if you have yet to file a lawsuit in state court, you must include the claim as an asset in your bankruptcy paperwork. The court-appointed federal bankruptcy trustee will then evaluate the claim. If the personal injury case appears solid, the trustee will step in your shoes; whatever cash settlement or judgment that might emerge will become property of the bankruptcy estate. The proceeds will be paid out to your creditors in the course of the Chapter 7 liquidation, although you are entitled to what’s left over, if anything, after the discharge. The trustee will review the claim with your personal injury lawyer, and that lawyer may continue to handle the file on behalf of the trustee. On the other hand, if the trustee determines that the claim is marginal, the trustee may decide against pursuing it. If that occurs, you and your personal injury lawyer can press the claim as if there is no bankruptcy involved. But the trustee, rather than the injured party, is by law in control of the decision making once you filed the bankruptcy petition.

In the pre-bankruptcy phase, any consumer will have lots of Wisconsin bankruptcy questions. In the kind of scenario outlined above, there are lots of technicalities that can’t be fully addressed here, so it is essential to obtain the guidance of a qualified Wisconsin bankruptcy lawyer right from square one. It’s your bankruptcy attorney’s job among other things to run interference for you in connection with both the bankruptcy and the personal injury matters. At all times, full compliance with the bankruptcy code is at the top of the priority list.