A pending personal injury action is considered an asset for purposes of a Chapter 7 bankruptcy proceeding. Failure to disclose such action in a bankruptcy proceeding can result in dismissal of the personal injury claim. It is crucial to ask about any bankruptcy proceedings at personal injury depositions.
A plaintiff will lose their legal capacity to subsequently sue on a civil claim by failing to disclose a known civil claim in a bankruptcy proceeding. Courts have upheld this loss of legal capacity even in instances where the bankruptcy proceeding is ultimately dismissed. Under the doctrine of judicial estoppel, parties are precluded from pursuing claims that were not disclosed in a bankruptcy proceeding. Courts want to avoid giving a plaintiff an unjust reward by allowing a plaintiff to collect on an undisclosed claim.
Bankruptcy Assets
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