Following an auto accident, your auto insurance company owes you certain benefits. Two of the most critical benefits to your financial survivor are the payment of wage loss benefits and the payment of your medical bills. If either of these benefits are not being paid by your auto insurance company, this can lead to a severe financial crisis quickly. This of course can lead to potential bankruptcy. There are some very important things that you should be aware of prior to filing bankruptcy after an auto accident.
What is Supposed to Happen?
Under the terms of your auto insurance policy, your auto insurance company must pay wage loss to you for time you miss from work as a result of your automobile accident related injuries. So, if your doctor says you are physically unable to perform your job as a result of your injuries related to an automobile accident, your auto insurance company is obligated to pay your wage loss at a rate of 85% of your pay for up to three years following the auto accident issue (up to the maximum monthly wage loss rate which is an excess of $6,000 in 2024). This payment of wage loss is obviously key to your financial survival. However, your auto insurance company may deny your wage loss benefits because they feel as though you are not disabled or they feel that the reason for your disability is not related to the auto accident at issue.
Additionally, your auto insurance company is obligated to pay your auto accident related medical bills following an accident. The standard by which your auto insurance company is to pay your medical bills is whether or not the medical bill is reasonable, necessary and related to the automobile accident issue. If your insurance company does not believe that the bill is reasonable or necessary or related to an automobile accident, they can deny payment of your medical bills.
Financial Crisis?
If your auto insurance company is not paying your wage loss benefits, how are you supposed to pay your daily and monthly expenses? Many hard-working families in our community live very close to their monthly income. As a result, if you have no income for an extended period of time, this can lead to a financial crisis very quickly. As a result, things like eviction or foreclosure can happen in a matter of months.
Can I, or Should I, Declare Bankruptcy?
The answer is that you absolutely have the right to declare bankruptcy at any time. However, this can have drastic effect on your automobile accident rights. When you declare bankruptcy, you must list your assets. If you have an open wage loss claim and/or a potential claim against the driver who caused your automobile accident related injuries, then these things are considered “assets” of your bankruptcy. So, if you choose to file bankruptcy during the pendency of your automobile accident claims then these will be listed among your other assets and the bankruptcy trustee will essentially replace you as the plaintiff and he or she will have full control over your case. In the end, the trustee will use the funds from the lawsuit to pay your debts, and you may receive a portion of it at the end. This is not an optimal result.
Talk to Your Lawyer
If you have any thoughts of, or questions about, filing bankruptcy after an automobile accident, you should consult your auto accident lawyer immediately. Do not under any circumstances file a bankruptcy petition without discussing it thoroughly with your lawyer before filing. Additionally, you should make your bankruptcy attorney fully aware of the fact that you have an open and/or pending/potential auto accident claim. You auto accident attorney and your bankruptcy attorney can then communicate and discuss the best way forward for your financial protection.
Things to Keep in Mind
Keep in mind that your automobile accident attorney will be suing for any unpaid wage loss benefits as well as any unpaid medical bills associated with your accident. Therefore, your auto accident injury attorney can communicate with your creditors and indicate to them that there is a pending or potentially pending lawsuit, such that they will be protected with the proceeds of the lawsuit. In some cases, your creditors may put a lien on your file which can be honored by your attorney when the payout happens down the road. This will protect you from debt collection efforts during the pendency of the lawsuit.
If you’ve been injured in an automobile accident, and are struggling with your bills and your financial future, give the experienced attorneys at Femminineo Law a call right away. We put your future and financial security at the forefront so that we can take care of you and make sure that you receive the compensation that you deserve to avoid financial ruin. Call us now at 855.65.CRASH or contact us.
