Malpractice lawyer says this about BK...

[Flamingo]

As I mentioned in my initial posting above and to you in postings months ago when you posted, nothing in a lawsuit is guaranteed. If the doctor you sue decides to fight, and the majority do so be prepared, it can be a long, drawn out process. The bills will be lingering during that time probably accumulating all sorts of fees and late charges. However, they will be notified of a pending lawsuit (if your attorney writes them as he states) and by that they will notice you have legal representation. If you win, you pay off the bills; if you don't, you file BK. I think you know that. Or you can appeal if you don't win...there are all sorts of options in life that can worry one to death. Sometimes there are too many forks in the road instead of just two. You did the right thing by investigating a lawsuit so you will have to go by the advice of your attorney to get you through the months to come. If you never filed and let it go, you would always wonder "what if we did file that lawsuit...." No one can predict the outcome of your lawsuit so you need to rely on the expertise of your attorney. I would leave it at that and not worry about the bills as there is nothing you can do about them at this point unless you hit the lottery and can pay them all off! Enjoy your family and let your attorney work for you.

[newbeginning]

Thank you all. I am doing the best that I can to get as much information as possible before making decisions regarding bK, etc. My malprac attorney works on contingency and covers all expenses. If we lose, we lose nothing. If we win, he gets 45%.

A formal letter was sent to the office of the physician in question today. As mentioned, if we win, we pay off our debts and move on. If not, we file... I suppose the worst case scenario is that the physician fights and this drags on and we "forced" to file for BK because creditors are tired of waiting. Or just as worse, the settlement or award doesn't cover all of our monetary losses after the attorney's cut and taxes.

Are lawsuit awards counted as income? Taxable? I would imagine so...

Thank you all. I will keep you all informed...

[HHM]

Don't quote me, but I beleive that portion of the award that is designated for actual monetary loss on your part (i.e. medical bills) is not taxable income. But any award for pain and suffering, punitive damages, (etc.) would be considered taxable income.

Also, keep in mind, as has already been mentioned, if you file BK, every part of the award is subject to your BK estate unless there is an exemption.

[BKParalegal]

A couple of points. First, in Texas there is a Personal Injury Reward exemption in Bk with a limit of $50,000. So if the amount is less than $50k it is completely protected in BK. Since the PI case is pending( and by the way the atty can have the awarded funds set up as an annuity or trust for medical expenses and that is protected as well), I would approach like this, go speak with a BK attorney and let him know your situation. If he or she is competent, then they will mention the $50k exemption and the startegy I would take is file the BK with an estimated award amount of less than $50k, and then see if the Bk Trustee wants to keep your case open to see if you win a larger amount. I would then file a Motion to Abandon in regards to the Trustee interest in your Personal Injury case and I guarantee no Judge will let a BK trustee profit from your wife's cancer.

Good Luck

[newbeginning]

BKParalegal,

Thank you for that information. I want to be in a good position before further conferring with both attorneys (BK and Malprac). Here is something that I am not quite certain of...

Is it possible to file BK, get judgment/award from malpractice suit, and prevent estate from getting any of the award? That is, if we use exemption of $50K, file motion to abandon, etc. We will still be in the position to eventually get a discharge of our other debts by filing correct?

Thank you!

[HHM]

You will get your discharge no matter what.

Generally, PI award exemptions tend to be very qualified (maybe not TX, I would have to see), but many states with similar exemptions limit the exemption to the award for actually monetary loss, any part of the award that does not compensate actual monetary loss, would not be exempt. However, you would need to read the TX exemption and any associated judicial interpretations to know for sure.

The problem here is, for the trustee, cases like this are easy money and you cannot readily force abandonment. So, even though your BK case will stay "open" for the duration of the malpractice case, you will receive your discharge on time.

[newbeginning]

Thank you. I have been trying to find a site that mentions personal injury exemption in BK for the state of TX w/o success. Is there a definitive site for this?

Thank you.

EDIT: I found this site which shows that there are NO exemptions for personal injury! Is this outdated or am I missing something?

http://weberlaw.com/exemptions.htm

[BKParalegal]

New,

First off, my apologies, it was late and I was working on a file in WI, not Texas when I gave you the exemption amount. In Texas, there is not a specific exemption for Personal Injury, but in the state of Texas, you have the option of using Federal Exemptions, and that includes the exemption 11 USC 522(d)(11)(D), which is for Personal injury rewards, there is no limit on it, but the amount does not allow compensation for pain and suffering or actual pecuniary loss.

Sorry for the error in info and good luck

[newbeginning]

The important thing is that clarification was made. Thank you.

It just amazes me how victims are more often than not, unfairly placed with burdens that seem to me, unjust. Here is my wife who has endured 6+ months fighting for her life from stage IV breast cancer likely due to negligence, and the law and IRS makes it difficult and laborious to seek justice and/or takes advantage of any monetary awards (that will never compensate for what has occurred and what this means for her for the rest of her life) that may come about (taxes!).

Anyway. Thank you.