When is A Personal Injury Settlement Part of A Bankruptcy Estate?

Our office recently represented a person who was entitled to receive a Class Action Settlement regarding a medical procedure she underwent over 10 years ago.  The client filed her Chapter 7 bankruptcy in 2007 and successfully received her discharge.

However, once the bankruptcy trustee received notice of a Mass Tort Settlement that would pay over $88,000 to our client, a motion was filed by the Trustee to reopen the bankruptcy case.
We objected to the Trustee’s motion.  We argued that the asset (settlement proceeds) did not belong to the bankruptcy estate but was instead the property of our client.

The bankruptcy Judge heard oral arguments on this matter.  In a written opinion (In re: Segura, case No. 07-31907, N.D. Ohio) the Judge determined that out client was not ‘injured’ prior to the bankruptcy filing.  The fact that a defective product was implanted in our client prior to the bankruptcy filing did not determine that the injury became a bankruptcy estate asset.  Therefore, our position prevailed and out client got to keep the entire settlement.

We aggressively advocate for our clients.  Bankruptcy law has many gray areas.  We fight for our clients’ rights.

If you would like to discuss any bankruptcy issue, feel free to contact Toledo, Ohio based attorney Fredric Boyk at (419) 327-6160.