Personal Injury Lawsuits and Bankruptcy

Personal Injury Lawsuits and Bankruptcy2023-03-08T21:58:32-07:00
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If you have been injured in an accident and are pursuing a personally injury claim, you may want to be aware how filing for bankruptcy can negatively affect you case.  When you file for Bankruptcy in Arizona, you give up control of your personal injury lawsuit.  In a chapter 7, the Trustee’s job is to take all non-exempt property, turn it into cash, and distribute that cash to your creditors.  In a Chapter 13, the proceeds of any settlement or judgment are used to fund your Chapter 13 plan.  Essentially, the right to collect money is out of your control until the trustee gives up the property.  If the trustee determines that the case has value in excess of the exemption, they may want to administer the personal injury claim as an asset of the bankruptcy estate.  On the other hand, if the Trustee finds the claim to be of inconsequential value, they may decide to abandon their interest in the cause of action.

In cases which you are being sued, so long as the debt is dischargeable, your personal obligation to repay the debt will be discharged in bankruptcy.  Also, the lawsuit has to stop while you are in bankruptcy unless the other side gets relief from the automatic stay.  Even if a default judgment has already been entered, by filing bankruptcy you can avoid the judgment and eliminate the underlying debt.  The personal injury case will presume once the bankruptcy case is over.  Note, bankruptcy does no stop any type of criminal proceedings.

Make sure to disclose to your bankruptcy lawyer that you have a lawsuit pending.  The lawyer will be able to put a strategy together to handle the situation.  If you fail to disclose the lawsuit, you could lose the right to begin or continue the action.


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"Benjamin Wright with Wright Law Office made a very difficult time for us much easier. We were struggling and did not know what our options were. He explained all our options and helped us to make the best financial decision. They made things easy and were always available to answer any questions we had. I would definitely recommend him."
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Why should you hire our firm to represent you in bankruptcy?

Great question. Here are a few reasons:

  • 1. Bankruptcy is our sole area of practice. Attorney Wright has over 10 years of experience in the field of bankruptcy and has helped over 1000 people successfully file.
  • 2. Attorney Wright has an accounting background that is useful in analyzing complex financial documents. Prior to law school he obtained a degree in accounting from the University of Wisconsin School of Business. He exercised his strong numerical aptitude in the field of accounting, including several years with The Kohler Co., before ultimately deciding to pursue a law degree.
  • 3. New clients meet with an attorney during their first visit. We understand your time is valuable. It is important your questions are answered quickly and accurately so you can take appropriate steps to secure a better financial future and eliminate fear and stress.
  • 4. In business, referrals are the highest form of professional compliment. We frequently receive referrals from other lawyers and previous clients.
  • 5. Our firm is small which enables us to focus on quality over quantity. We don’t have billboards on the I-10 or banners affixed to public transportation. Our approach is a bit more understated. We care about people and doing things right and it shows in our low employee turnover and positive reviews.
  • 6. Perhaps the most important consideration is the cost of filing bankruptcy. We continuously assess our fees to ensure we offer fair and competitive pricing. We want to offer you a deal without sacrificing the quality of your experience.
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    Mr. Wright and his staff were amazing. They made a negative situation a lot better and turned it into a positive. Could really tell they care helping people and I will refer their Phoenix Bankruptcy Attorney firm to friends and family. Thanks again.

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    I called around looking for the right bankruptcy lawyer and came across Benjamin Wright. He personally called me for the consultation seeing how I live in Kingman AZ. He was very helpful from the start and his staff was very friendly and explained any questions I had, sorry for all the questions. I would definitely recommend Wright law offices, and I do!! Thanks for everything, you made what seemed like a hard thing to do simple!! You guys rock!!!

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    FAQs About Bankruptcy in Arizona

    For individuals who maintain a steady income but are grappling with debts that need more time to be cleared, Chapter 13 bankruptcy could provide a viable solution. This form of bankruptcy enables debtors to retain their property while adhering to a three to five-year repayment plan. In Scottsdale, the bankruptcy attorneys at Wright Law Offices utilize their expertise in developing personalized Chapter 13 plans that are uniquely designed to suit your circumstances and work in your favor.

    When credit card debt spirals beyond control, the feelings of isolation and stress can be daunting. However, with a knowledgeable lawyer by your side, the situation can be transformed significantly. Lawyers are experienced in negotiating with formidable credit card companies, often succeeding in achieving reduced interest rates or a minimized debt total. At Wright Law Offices, located in Phoenix, our committed legal team stands ready to help you take back control of your financial situation and direct you towards other potential debt relief avenues like bankruptcy.

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