Should you file bankruptcy if you are suing someone?

Bankruptcy During a Lawsuit

Here is advice:

• If I were you, I would get an attorneys advice. I do know that after your bankruptcy is discharged and final, if you receive a large amount of money within 6 months after, you must pay it on your debts. Although, Im not sure if this pertains to law suit money.

• In most cases, your claim for damages would become part of the bankruptcy in a Chapter 7 and you would not longer have standing to pursue the lawsuit. The trustee has the option of taking over and applying the proceeds to your debt, letting you pursue the lawsuit and simply place a lien on th proceeds or abandoning the asset and letting you keep all of the money.

Any claim or potential claim must be disclosed in the documents you file for bankruptcy. The claim is then evaluated by the trustee and either abandoned by the trustee or it becomes part of the bankruptcy estate and is not yours any more. You may be able to exempt all or some of the potential payment from the claim, so be sure to discuss this with you bankruptcy lawyer.

First answer by Dee Fernandez. Last edit by Thylawyer. Contributor trust: 47 [recommend contributor]. Question popularity: 200 [recommend question]