Personal Injury Claims of the Debtor
Under Illinois law, a debtor in bankruptcy is entitled to exempt $15,000.00 for a personal injury award or settlement. This exemption applies to such claims, even if a personal injury lawsuit has not yet been initiated. If the debtor becomes entitled to receive any amount in excess of $15,000.00 for a personal injury claim, the bankruptcy trustee is permitted to assert a claim against any such amount. If the trustee decides to pursue a claim against proceeds from a personal injury matter, any funds recovered will be paid to the creditors.
If a person with an injury claim in Illinois is considering bankruptcy, it is important to know whether the proceeds from the claim will exceed $15,000.00. If so, the debtor in bankruptcy will risk losing any proceeds in excess of $15,000.00.
If you have questions related to asset protections available in bankruptcy, call our office for a free consultation.