Are personal injury judgments dischargeable in Gurnee, Illinois?
Personal Injury - April 2, 2025
Bankruptcy and personal injury claims can each be stressful processes on their own, but when they intersect, they can be overwhelming and confusing. When you hire a Gurnee personal injury attorney from Horwitz, Horwitz & Associates, they will help you navigate the ramifications that one has on the other.
They will also answer your question: Are personal injury judgments dischargeable? Below is a look at a few key points that you need to know in advance.
What constitutes a personal injury judgment?
The judgment in a personal injury lawsuit is the final decision in an injury claim. This is when a defendant is declared negligent and liable, and when you learn how much you may recover in damages. However, if you or the defendant needs to file for bankruptcy, this can affect an upcoming or past personal injury settlement. In most instances, though, since insurance coverage typically covers damages in a personal injury claim, defendants are not often in a position to go bankrupt due to a personal injury judgment.
What judgments can be discharged in bankruptcy?
While most debts can be discharged through federal bankruptcy proceedings, there are critical exceptions that apply to personal injury cases:
- Liabilities arising from drunk or impaired driving accidents cannot be eliminated through bankruptcy
- Judgments stemming from malicious acts remain enforceable even if the defendant declares bankruptcy
It’s important to note that defendants retain the right to challenge unfavorable decisions. If a court rules that a personal injury judgment cannot be discharged, the defendant may file a motion to appeal this determination, potentially seeking relief through higher courts.
Who can have their personal injury judgments discharged?
There may be times when either the plaintiff or the defendant needs to file for bankruptcy in personal injury cases. When this happens, personal injury proceedings essentially halt until the individual’s debts and assets have been settled in bankruptcy court. When an individual in a personal injury case files for bankruptcy makes a difference in what it means for their judgment.
If a defendant files for bankruptcy, they can potentially be absolved from paying damages. If they filed for Chapter 7 bankruptcy, an immediate (automatic) stay is put on all legal proceedings and potential judgments. A defendant can object to lifting the automatic stay if a party attempts to remove it prematurely.
If a plaintiff in a personal injury case files for bankruptcy, they could potentially lose a personal injury settlement they may be entitled to receive. Once they file, a personal injury judgment could be considered as an asset that can be used to eradicate their debts. In some circumstances, individuals filing for bankruptcy may be entitled to an exemption under bankruptcy law. Personal injury claims may qualify for an exemption of up to $15,000 before the rest becomes part of the bankruptcy estate.
Does the plaintiff have options if the defendant files for bankruptcy?
If the defendant declares bankruptcy during a personal injury lawsuit, it can potentially leave you as the plaintiff with limited options for recovery. The specifics of the case will make a difference in what options you have and how you can proceed. Your lawyer can provide counsel to help ensure that you can still recover some form of compensation.
Let Horwitz, Horwitz & Associates represent you today
Horwitz, Horwitz & Associates can help you navigate the implications of bankruptcy on your personal injury claim. Whether you are filing or the defendant has filed, we can provide you with trusted counsel and effective solutions to ensure you get the best outcome possible. We also strive to mitigate the ramifications it may have on your life.
To learn more about your options, contact us online or call our office at (800) 985-1819 to schedule a free consultation.
