Have Legal Questions? Ask a Lawyer Now.
Dear Customer, I am very sorry to learn of this unfortunate event. Your potential medical malpractice claim counts as an "asset" when you fill out your schedules. The value is unknown, but the claim is still valid and you must disclose it when you file. (It is unlikely that a trustee will go beyond simply asking you about the basis for the claim and the efforts you have taken to possibly pursue it, but it must be disclosed).
You just disclose the claim, the claim becomes part of the bankruptcy estate and the trustee can choose whether or not he or she wishes to pursue it on behalf of the bankruptcy estate.
If your debt totals $200,000.00 and your claim settles at, or you get a judgment for, $500,000.00 (either through bankruptcy or independently), here is how it would work.
(1) If the bankruptcy trustee pursued the claim (you filed bankruptcy, disclosed the claim, and the trustee believed it was worth hiring a lawyer and pursuing the claim), the trustee would first pay the attorney, then pay off all of your debt, you would then get the remainder.
(2) If you pursue your claim now, get the judgment, and then deal with your debt, the same result will happen, minus some of the trustee's fees for management (you will end up with a little more) - You will get a judgment, the attorney will get paid, you will need to pay your debts, and then you will keep the remainder; finally,
(3) If you file bankruptcy, disclose the claim, and the trustee decides not to pursue it himself because it does not seem worth the time and money, the claim will revert to you, you can pursue it yourself, and if you win the $500,000.00, the only expense you will have to deduct is the attorney's fees as all of your debt has been taken out through the bankruptcy. (This assumes no bankruptcy creditors object).
Thank you very much, and you do the same.
I hope that my answer was of assistance to you. My goal is to provide you with excellent service – if you feel you have gotten anything less, please reply back, I am happy to address follow-up questions. Please remember to rate my service once you have all the information you need. Thank you for your business!
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).