Many of my clients come to me after a personal injury has rendered them unable to work.

Their income loss causes them to default on their debt payments.

Often this results in them needing to file bankruptcy.

This article explains how personal injury claims can be protected in bankruptcy in California.

And how to get a referral for a good PI Attorney.

Personal Injury Claims In Bankruptcy

Many bankruptcy cases become necessary due to medical expenses incurred after an accident.

And bankruptcy is a great way to eliminate those debts.

But there is something you may not know.

If you were not at fault, the rights you have against the the party who was at fault, is property which you own.

Just like a car or a boat or money in your bank accounts.

And that property might be at risk in a Chapter 7 case and count as part of how much you need to pay in a Chapter 13 case.

Are Personal Injury Claims Exempt (Protected) In California Bankruptcy?

To determine whether your personal injury claim is protected, you need to know what exemptions are available in your state.

And, which state’s exemption laws apply in your case.

In California, there are two different exemption options (CCP 703 and CCP 704).

Personal injury awards are exempt under both exemption options, but in different amounts.

The CCP 703 Exemptions

Under the “703 exemptions” personal injury awards are protected up to $29,275.

Plus, there is an additional “wildcard” exemption under 703 which can be used for another approximately $30,000 (assuming you don’t need to take that on another asset).

The CCP 704 Exemptions

The 704 exemptions are typically taken in cases where there is a large amount of equity in a homestead (where you reside).

Personal injury awards are exempt up to the amount “necessary for the support of the judgment debtor and spouse and dependents of the judgment debtor”.

So how much is that?

Ultimately, that is up to the Judge in your case.

Your age, earning capacity, expenses and similar things will factor into the determination.

So, potentially 704 can exempt more than the 703; but it could also exempt less.

Obviously an analysis by an experienced bankruptcy attorney is necessary to advise you on what is likely to be protected in your situation.

Referral For Personal Injury Attorney In California

As with anything legal, it is important to hire a quality experienced attorney to represent you.

My office maintains a very select referral list of qualified personal injury attorneys.

Contact my office if you need a referral for a personal injury attorney.


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