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Protecting Personal Injury Claims in Bankruptcy Cases

Complexities of Property of the Estate, Stay Relief, Judicial Estoppel, Exemptions, and More

Recording of a 90-minute CLE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Wednesday, February 10, 2021

Recorded event now available

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This CLE course will show personal injury attorneys a way forward when bankruptcy intersects their case, including dealing with judicial estoppel, by leveraging recent case law criticizing its application in bankruptcy. The panel will address key decisions to be made depending on: whether the defendant or plaintiff in the civil action is the entity that filed bankruptcy, which chapter the debtor filed under or converts to affects the analysis, whether the personal injury action was filed before, during, or after the filing of the bankruptcy. The panel will also address settlements and bankruptcy priority of liens and claims in any proceeds recovered.


Any party in a personal injury matter--plaintiffs, defendants, co-parties, future claimants--could file bankruptcy before, during, or after a civil action is initiated or a claim arises. That filing has an impact on the personal injury claim. Personal injury attorneys can be overwhelmed in deciding how to respond, fearing the case is over, or giving up options and rights.

Bankruptcy cases involving personal injury claims are complex, but there are ways to protect against personal injury, wrongful death, and similar claims. Counsel need to understand whether the claim is property of the estate and if the automatic stay applies, what it applies to, and whether any party is attempting to enforce claims against the debtor. Counsel also need to know which non-bankruptcy courts have concurrent jurisdiction to decide which kind of stay issues. Bankruptcy Rule 2004 permits broad discovery of the debtor's financial condition, and such examinations often yield valuable information beyond what is in the debtor's schedules.

Counsel representing a plaintiff who seeks bankruptcy relief should make certain that the matter is correctly and fully disclosed. Failure to disclose is the biggest threat to personal injury claims. Attorneys representing the plaintiff may be asked by a trustee or a debtor in possession to continue or initiate a personal injury lawsuit. Contingency fee arrangements are not forbidden. If the plaintiff is the debtor, it may be able to exempt the lawsuit.

Counsel will also want to understand the settlement process and what happens to settlement proceeds paid to a plaintiff before, during, or after bankruptcy, including the order in which medical liens, secured creditors, tax claimants, and other creditors' claims might be paid.

Listen as this panel discusses the consequences of bankruptcy on a personal injury case and what action counsel for either the plaintiff or defendant can take to preserve the claims and defenses.



  1. Property of the estate
  2. Automatic stay issues
    1. Claims against the debtor vs. claims filed by the debtor
    2. Counterclaims, cross-claims, third-party claims
    3. Claims against non-debtor defendants
    4. Relief from stay
    5. Tolling
    6. Concurrent jurisdiction
  3. Standing and judicial estoppel
  4. Exemptions
  5. Taking advantage of bankruptcy discovery
  6. Issues arising from post-judgment bankruptcies


The panel will review these and other important issues:

  • To what claims does the automatic stay apply?
  • What kind of stay relief is available?
  • What is judicial estoppel?
  • Does the bankruptcy court have to approve the settlement?
  • How are the proceeds distributed?


Baxter, John
John T. Baxter

Nelson Mullins Riley & Scarborough

Mr. Baxter focuses his practice on bankruptcy law and consumer financial litigation. He has experience representing...  |  Read More

O’Keefe, Kurt
Kurt A. O’Keefe

Detroit Bankruptcy Lawyer Kurt O’Keefe

Mr. O’Keefe is a solo practitioner with 30 plus years of experience in bankruptcy and other consumer law fields,...  |  Read More

Ruddy, John
John C. Ruddy

Managing Member
Ruddy & Petersen Law Group

Mr. Ruddy concentrates his practice in the areas of litigation concerning family law, eminent domain, condemnation,...  |  Read More

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