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Should I file BK before or after judgment on a PI case.

1 Answers. Asked on Mar 08th, 2013 on Bankruptcy - Florida
More details to this question:
I rear ended a person who's insurance is now trying to collect their losses since I didn't have any bodily injury coverage which is legal in my state. I've been contacted by a subrogation service that is stating a claim of 25,000.00. When I spoke to them about the matter they insisted on 50 monthly payments of 500.00 or a upfront sum of 12,500 to settle out of court. I know BK will be in my future because there is no way I can pay these debts. I do not own a home and have a car valued at less than 800.00. Should I let this go to judgment and file BK after, or file now before this goes to judgement at all. I know I already meet criteria for Chapter 7 BK. I've read confusing things however about judgement being made even after BK discharges the debit.
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Answered on Mar 08th, 2013 at 9:10 PM

Getting the judgment before you file bankruptcy does not affect whether the debt is dischargeable unless they get a judgment for something that is non-dischargeable in bankruptcy (such as fraud, or driving while intoxicated)

As a general rule, it's safest to file the bankruptcy first, but it isn't always necessary.

One reason for filing bankruptcy prior to the judgment would be if the potential judgment is very large and you want to file a Chapter 13 case, the judgment could prevent one from qualifying for Chapter 13 because of the debt limits in that chapter.  See Chapter 13 debt limits

Another reason for filing the bankruptcy first is that once the judgment is entered, they can start trying to enforce the judgment under the laws of your state.  Typically this means garnishing wages, seizing bank accounts, and putting lien against property.  You don't disclose what your job status is, so it's hard to advise in that regard.  In any event, any wage garnishment or other collection action would be stopped once the bankruptcy case was filed.

In your case, with the assets you listed and type of debt, it shouldn't make a difference.  However, if you have a job, your wages could be garnished and your bank account seized to enforce the judgment if it is obtained prior to you filing your case.

Mark Markus has been practicing exclusively bankruptcy law in California since 1991.  He is a Certified Specialist in Bankruptcy Law by the State Bar of California Board of Legal Specialization,  AV-Rated by, and A+ rated by the Better Business Bureau.  

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If you're struggling to pay off your delinquent debts and getting hounded by collection agencies, then it's time to address your financial problems. And filing for personal bankruptcy may be the ideal solution. Whether you're an individual or married couple considering Chapter 7 or Chapter 13 bankruptcy, or a business considering a Chapter 11 reorganization, or a farmer considering Chapter 12, you need the advice and guidance of an experienced bankruptcy attorney. Your lawyer can help determine which form of bankruptcy is right for you, prepare and file all of the paperwork, and advise you throughout the bankruptcy process.
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