Medical bills are reportedly one of the leading causes of personal bankruptcy filings. Faced with such bills, patients with medical malpractice claims sometimes institute bankruptcy proceedings, either before or during the pendency of an action seeking damages in state court. The proceedings in one arena will necessarily affect the proceedings in the other. This article will address the interplay between those federal and state proceedings.
The key point for attorneys to remember is that patients who have received a discharge in bankruptcy may be foreclosed from maintaining a malpractice action, even if that action was not brought until after the patient’s bankruptcy proceeding concluded.1 Those plaintiffs who have failed to list an existing right of action as part of the bankruptcy estate are deemed to lack capacity to sue. Since a properly prepared motion can lead to a complete, pretrial dismissal of any action based on a claim that arose prior to the patient’s discharge in bankruptcy, this is an area of interest for attorneys representing both plaintiffs and defendants.
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