Will Filing for Bankruptcy Impact a Workers’ Comp Settlement?
Bankruptcy Lawyer Tampa, FL
If you are considering bankruptcy as a solution to your financial situation, you will probably have a number of questions surrounding the process. You may be especially hesitant if you have received a settlement for a workers’ compensation case. Chances are, you are financially reliant upon your workers’ comp settlement to help you manage your day to day expenses and help you get back on your feet again. The last thing you want is to put that in jeopardy by pursuing bankruptcy.
Reasons to File
Filing for bankruptcy is not an easy decision to make. Carefully weighing this decision with the help of a bankruptcy attorney can help in making the most informed decision possible. There are a number of reasons a debtor may consider filing for bankruptcy:
- You are at risk of foreclosure on your home
- You are at risk of legal action from lenders
- To receive protection in the form of an automatic stay
- You are unable to dig yourself out of debt and are in need of a fresh start
- You have a significant amount of medical debt from your accident
- You lost your job
Despite receiving a workers’ compensation settlement, you may still be struggling to cover your expenses. Because of this, bankruptcy may be a viable solution. However, you will want to speak with your attorney regarding whether you will be able to retain your settlement should you proceed.
Workers’ Compensation Settlements
When a person is injured while at work, they have the ability to receive workers’ compensation benefits to aid in their recovery process. Workers’ compensation benefits can include weekly payments to the employee for a portion of their lost wages in addition to covering medical expenses.
In some cases, a person may choose to accept a settlement offer in lieu of the ongoing support provided by the employers’ insurance carrier. The purpose for a workers’ compensation settlement is to help an employee has been injured with:
- Medical Expenses
- Lost Wages
- Future Lost Wages
- Future Medical Treatment
- Disability Payments
- Attorneys Fees
Depending upon the state where the employee lives and the negotiations that occur; a settlement may be received in a lump sum or structured payments over a period of time. A workers’ compensation attorney may be helpful when making decisions regarding how payment should be received.
Is a Settlement Considered an Exemption?
When it comes to bankruptcy and workers’ compensation settlements, their can be a number of complexities to contend with. In many cases, employees who have been injured in the workplace may no longer have the ability to work. When coupled with significant medical expenses from the accident, bankruptcy may seem to be the only option.
Each state has different laws regarding this process. While some states view workers’ comp settlements as an exemption, others, do not. Chapter 7 bankruptcies have a fairly quick turnaround. This means once you have filed for bankruptcy, your case may be resolved before receiving a settlement. It’s important to note that once a bankruptcy has reached completion and your debts have been discharged, any settlement you receive after the fact may not be taken from you.
When considering a Chapter 13 filing, the process may look a bit different, meaning your repayment plan may require some restructuring. When determining whether a workers’ comp settlement is an exemption, it’s best to speak with a bankruptcy attorney in your state.
Filing for bankruptcy is not an easy decision to make. You will want to make sure that you have considered every option regarding the best way to manage your debts. There can be a number of benefits to taking steps towards bankruptcy proceedings. Make sure that before doing so, you have consulted a bankruptcy lawyer Tampa, FL offers at The Law Office of Michael A. Ziegler Law, P.L. to discuss your options and create a clear plan for the best way to move forward.