????? Is A Pending Negligence Claim Dischargeable Under Chapter 7 ?????

[Flamingo]

HHM and Flamingo,

I think you two are in agreement when it comes to the BK/ed business.

But HHM is of the opinion that the owner's personal liability for negligence will be discharged if he individually files for Chapter 7, while Flamingo is of the opinion that the owner's personal liability will not be discharged even if he individually files for Chapter 7.

Could you please clarify this?

I am assuming you are the owner of this hypothetical business from your postings cause I feel you are getting worried as to the responses you are receiving. Remember, you can always go get legal advice from an attorney and we are just going by what you are telling us. I am assuming the business had insurance coverage on the day the event occurred that injured the employee. If so and the matter is found in favor of the plaintiff, the business' insurance would cover the claim. Since this event apparently already occurred, insurance is in place that would cover the plaintiff if found in its favor even if the business or owner filed BK. It's the date the event occurred that matters here, not the date of bankruptcy.

Simple example...It would be the same as if there were a car accident and the injured person sued the driver. If the driver filed BK in the following months, the injured party can still recover from the driver's insurance that was in place at the time of the accident.

[Arctura1]

Actually my uncle is the injured worker and his employer did "not" have workers comp insurance (or any insurance for that matter). My uncle is thinking about suing his employer for negligence but the owner of the employer/business told my uncle that he will just file for bankruptcy because his business is struggling as is.

So yea, employer/owner did not carry insurance. In this case, if the employer/owner file for Chapter 7, is my uncle out of luck?

Thanks!

[HHM]

Workers Comp is usually run by the State and is compulsory for employers, regardless if the business paid its workers comp, your uncle can still file a claim.

[Arctura1]

Workers Comp is usually run by the State and is compulsory for employers, regardless if the business paid its workers comp, your uncle can still file a claim.

Yes actually the state has paid my uncle from something called the uninsured employer's fund (?) and I think the state is now going after the employer for not carrying any insurance.

It's my understanding that my uncle can, in addition to collecting workers comp, sue the owner of the business for negligence, but I told him that his claim might be discharged if the owner files for Chapter 7.

So, will my uncle's negligence cause of action against the owner, not the corporation, be discharged if the owner files for Chapter 7?

Sorry about all the questions, I just really want to help my uncle.

Thanks!

[HHM]

Yes, the same rules apply. If the claim does not fit into any of the exceptions to discharge in section 523, the claim is discharge. So, if he sued the owner personally (which is a questionable cause of action in the first place for this type of claim unless the owner was directly involved in the accident), and the owner files personal BK-7, the claim would be discharged.

[Arctura1]

Yes, the same rules apply. If the claim does not fit into any of the exceptions to discharge in section 523, the claim is discharge. So, if he sued the owner personally (which is a questionable cause of action in the first place for this type of claim unless the owner was directly involved in the accident), and the owner files personal BK-7, the claim would be discharged.

I see. Thanks for all your help.