What Happens if You File for Bankruptcy After a Vehicle Collision?

Car Accident Lawyer

Being involved in a car accident can seriously impact the financial stability of any person. This may be especially true if you did not have insurance when the crash happened, and were deemed at-fault. Perhaps you simply forgot to make your last car insurance payment which resulted in a cancellation right before the collision, or you were unable to afford such coverage in the first place. Those who cannot keep up with their expenses, bills, utilities and debts related to the accident, may consider filing for bankruptcy.

It is a common misconception that filing for bankruptcy means that all your debts simply go away. However, this would be the ultimate scenario and does not happen to everybody. Here we have provided useful information about filing for chapter 7 or 13 bankruptcy after being in a car accident:

Chapter 7 Bankruptcy

If you file for bankruptcy under Chapter 7, then everything you currently own may become property of the bankruptcy estate. Which means, you have to disclose personal information about your finances and the car accident to your attorney, who will list all of your debts on the bankruptcy petition. Depending on several factors, you may either be discharged of a portion of your debts or be denied to operate under this bankruptcy chapter at all. Chapter 7 does not include a repayment plan, but the debtor may have some of their property relinquished in order to satisfy debts.

Chapter 13 Bankruptcy

This bankruptcy chapter entails the debtor to pay back the entirely or a percentage of his or her debts over the span of 3-5 years. If the accident occurred due to willful actions or while under the influence, then the debts related to the collision are unlikely to be discharged. However, the debtor can make reasonable payments into this plan based on how much he or she makes. If the debtor fulfills this obligation in good faith, then the remainder of the debts may be discharged. Or, the debtor may have to apply for chapter 13 bankruptcy again after that course is over, to pay off the rest of the debts owed.

Assistance from an Attorney

Those who are struggling as a result of a car accident, may want to meet with an attorney immediately. The bills associated with a vehicle collision can add up quickly. If you were deemed responsible for the crash, then you may not only have to pay your medical expenses, but the other driver’s as well. The situation can escalate very quickly where you feel as though you are drowning in debt. One of the best things you can do is reach out to a professional who is experienced in consulting with clients who want to apply for bankruptcy. Many people find relief knowing they have a chapter 13 bankruptcy lawyer Clearwater, FL relies on watching out for their best interest, who can provide advice and guidance especially during the application process. Sometimes seeking professional assistance after such a tragic financial incident, can help alleviate the weight of it.

 


 

Thank you to our friends and contributors at The Law Office of Michael A. Ziegler, P.L. for their insight into bankruptcy and auto accidents.