Question of the Day: What Happens to My Lawsuit in Bankruptcy?

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Explore:  Chapter 7 Damages

Lawsuits in BankruptcyQuestion:

I have a personal injury lawsuit and I want to pursue it but I need to file a Chapter 7 bankruptcy.  Can I still pursue my claim in Arizona?

Answer:

When you file for chapter 7 bankruptcy  in Arizona all of your assets become part of what is known as your “bankruptcy estate”.  This includes potential claims such as personal injury claims or any type of lawsuit where you could sue someone and get money.

In a chapter 7 bankruptcy your case will be assigned a trustee.  The trustee has the power to step into your shoes and purse claims that you could have gone after before your bankruptcy case was filed.

So what does this all boil down to?  If you have a potential lawsuit and file a bankruptcy you may lose the right bring that lawsuit.  Your bankruptcy trustee can step in, file the lawsuit, and collect money for the benefit of your creditors.