Bankruptcy and Workers Compensation
Workers compensation can cause financial stress and worry. If you experience financial difficulty dealing with workers compensation, you may wonder whether filing for bankruptcy is an option you should consider.
Sometimes, people who suffer a workers compensation injury already have a pending bankruptcy case. Those people often have questions about what they need to do in the bankruptcy case after they suffer a workers compensation injury.
There are very important rules that you must consider if you have a bankruptcy case and a workers’ compensation case going on at the same time. One of the most important things that many people do not understand is that your property becomes the property of the bankruptcy estate while your bankruptcy claim is ongoing. This means that the bankruptcy court is ultimately in charge of decisions about your property.
Part of this property can include claims that you have against other individuals or businesses. There are several different things that could be considered part of the bankruptcy estate:
- Money in cash or in a bank account
- Other physical property (house, car, furniture, electronics, etc.)
- A right or potential right to property (a debt that someone owes to you, money that you are owed for work that you have done)
Your workers compensation case may also be considered part of your property for purposes of bankruptcy.
How does my property becoming part of the bankruptcy estate affect me in my workers compensation case?
The bankruptcy court is in charge of your property until the bankruptcy is discharged or dismissed. With a Chapter 7 bankruptcy, the discharge usually happens within a few months. However, a Chapter 13 bankruptcy will usually last for years.
During the time your bankruptcy is open, you do not really have full control of your property. The bankruptcy court controls your property.
Since the workers compensation claim is a property right, you will probably need to make the bankruptcy court aware of the workers compensation claim. The best thing to do is to get advice from your bankruptcy attorney about this because there can be some pretty bad consequences, including losing the right to pursue your case, if you do not inform the bankruptcy court about all your property.
If you have an attorney in your workers compensation case, you also need to make sure that attorney gets approved by the bankruptcy court to handle the workers compensation case. Your workers compensation attorney needs to be approved because the bankruptcy court is in charge of your property.
What should I do if I have a bankruptcy case and a workers compensation case?
Everyone would prefer to avoid bankruptcy if they could, but sometimes it is unavoidable. The interaction between bankruptcy and the workers compensation laws in Georgia can be confusing. If you do not do things correctly, the consequences are often severe.
Having an attorney review your case can provide you with answers to your questions. I provide free consultations in workers compensation claims so you can get your case reviewed and your questions answered.
Getting a free consultation scheduled is easy and only takes a few minutes of your time. To request one, just call our office at (770) 214-8885 or complete and submit our free consultation request form.
Jason Perkins is an attorney who specializes in representing injured workers. He regularly blogs about Georgia’s workers’ compensation system and issues that are important to injured workers and their families.
You can subscribe to his Georgia Workers Compensation channel on YouTube.