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It will depend on how long you wait after receiving your PI settlement. It is usually 1 to 2 years that they ask if you have received anything. Your medical bills would be discharged if you did declare bankruptcy.
However, keep in mind that anything you have an ownership interest in at the time you file for banktruptcy is subject to liquidation. So if you buy a home and a car, you would have to-at the least reaffirm them, because any equity would be subject to liquidation.
The longer you wait to file, the better chances you will have with the courts not attaching your PI settlement, but unless it has been two years (my estimate) you may have to disclose your settlement, and then it would be up to the trustee to deal with that at the time.
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