File for bankruptcy court protection and you give up all of your potential claims, including claims for personal injury, to the bankruptcy trustee. The District of Columbia Court of Appeals July 3, 2014 decision in Atkins v. 4940 Wisconsin, LLC forcefully makes the point.
Financial strain pushes well intentioned and honest folks into bankruptcy. It is an honorable tool for re-establishing your financial life, and wiping away crushing debt. What is often forgotten, though, is the debtor's duty to disclose not just all claims he may have against others, but any possible and contingent claims. At the moment you file for bankruptcy protection by delivering your petition to the court, every right of recovery you have becomes "property of the estate."
And it is the court appointed bankruptcy trustee, often a lawyer, who has absolute control over the claim--not you.
Mr. Atkins tried to game the system. His bankruptcy petition conveniently omitted reference to his potential slip and fall case. He later sued to recover money, and the defendant he was suing argued it was not Mr. Atkins' claim to make, anymore.
The court of appeals confirmed that Mr. Atkins could not bring the claim. His failure to list the personal injury claim in his bankruptcy petition amounted to a statement that he had no such claim. And since the bankruptcy petition and schedules were submitted under oath, the statement that he had no such claims was under the penalties of perjury. His later claim in a separate lawsuit was thus inconsistent with his prior disclosures to the bankruptcy court.
You can't swear to the absence of a claim in your bankruptcy petition and schedules, and later assert a claim in a lawsuit to recover money. The court will hold that you are not allowed to bring the claim. When you are prohibited from asserting a claim because you took an inconsistent position in an earlier case, it is called "judicial estoppel."
We most often see this issue arise in cases where parties have prepared legal papers without the assistance of counsel. As we have suggested in a prior post, do-it-yourself law is risky business.
Financial strain pushes well intentioned and honest folks into bankruptcy. It is an honorable tool for re-establishing your financial life, and wiping away crushing debt. What is often forgotten, though, is the debtor's duty to disclose not just all claims he may have against others, but any possible and contingent claims. At the moment you file for bankruptcy protection by delivering your petition to the court, every right of recovery you have becomes "property of the estate."
And it is the court appointed bankruptcy trustee, often a lawyer, who has absolute control over the claim--not you.
Mr. Atkins tried to game the system. His bankruptcy petition conveniently omitted reference to his potential slip and fall case. He later sued to recover money, and the defendant he was suing argued it was not Mr. Atkins' claim to make, anymore.
The court of appeals confirmed that Mr. Atkins could not bring the claim. His failure to list the personal injury claim in his bankruptcy petition amounted to a statement that he had no such claim. And since the bankruptcy petition and schedules were submitted under oath, the statement that he had no such claims was under the penalties of perjury. His later claim in a separate lawsuit was thus inconsistent with his prior disclosures to the bankruptcy court.
You can't swear to the absence of a claim in your bankruptcy petition and schedules, and later assert a claim in a lawsuit to recover money. The court will hold that you are not allowed to bring the claim. When you are prohibited from asserting a claim because you took an inconsistent position in an earlier case, it is called "judicial estoppel."
We most often see this issue arise in cases where parties have prepared legal papers without the assistance of counsel. As we have suggested in a prior post, do-it-yourself law is risky business.
