|
Straight
Track #173
| Bankruptcy and The FELA Richard
Haydu
Hoey & Farina Attorney
1-888-425-1212 Picture this hypothetical situation.
You have been injured at work on the railroad and have been unable
to return to your old occupation. If you do not have any insurance
benefits or other sources of income, you may be in serious
financial trouble. |
|
|
As time goes by, the bills begin to mount. You fall
behind on your mortgage, your car payments and other obligations. Perhaps
the railroad even plays games with your medical bills and delays
submitting them to the insurance company for payment. Creditors begin
calling you to demand payment and make threats. The railroad refuses to
negotiate your case in good faith, knowing that you are in dire financial
straits and hoping you will be forced to settle your claim for less than
it is worth out of desperation and financial necessity. One of your last
options is to consider filing for bankruptcy.
Does this sound like a horrible situation?
Unfortunately, this is an all too real scenario which plays out far too
many times for injured railroaders across this nation. How you handle your
bankruptcy filing may have a significant impact on your recovery under
your Federal Employers’ Liability Act (FELA) claim.
The federal bankruptcy law, 11 U.S.C. §101-1330,
governs how a bankruptcy is to be handled. In general, bankruptcy allows
you to seek some protection from your creditors and discharge most of your
debts when you owe more money than you can pay back.
Within 15 days of filing a bankruptcy petition,
schedules of a debtor’s assets and liabilities must be filed with the
court. This information submitted to the court is the means by which it is
determined how much the creditors can receive from your assets to pay back
at least part of the money you owe them. A person called a trustee is
assigned to the case. He or she oversees the administration of the
bankruptcy estate. The trustee’s job is to utilize the assets which are
listed on the schedules to get the creditors as much as they can in
partial payment of the debt which will then discharged against you.
The FELA claim is an asset of the bankruptcy estate and
any money that is received from the railroad by verdict or settlement can
be used by the bankruptcy trustee to satisfy your creditors.
Unfortunately, when sitting down with the attorney representing you in the
bankruptcy matter and setting out the schedules of what you own and owe,
railroaders have sometimes failed to include their FELA claim as an asset.
This occurs for several reasons. The bankruptcy attorney may not
specifically ask the client whether or not he or she has any pending
personal injury claims. The bankruptcy attorney may simply ask if the
railroader has any lawsuits and, at that time, a suit may not yet be
filed. Since he has not yet received any money for it, the railroader may
not realize that his FELA claim is an asset. Being concerned of the
bankruptcy proceedings, the railroader may simply have overlooked putting
the claim on the schedule of assets. Finally, the railroader may not yet
have sought out help from designated legal counsel who would have informed
him that the potential FELA claim must be considered as an asset.
What are the consequences of failing to include in a
FELA claim in a bankruptcy estate on the schedule of assets? The answer
depends upon when the mistake or oversight is discovered. The earlier the
mistake is discovered, the better.
If it is discovered before the bankruptcy is finalized,
the schedules can be amended and the claim, when settled, will be included
in the estate. If the bankruptcy has been finished and the debtors
discharged when the mistake regarding the pending FELA claim comes to
light, the case will be reopened by the trustee.
Under the law, the trustee actually “takes over”
your case from you. In effect, the trustee stands in your shoes. The
result is that the trustee has the power to settle the case for an amount
the trustee feels is in the best interests of the bankruptcy estate. In a
worst case scenario, after the creditors have been paid no funds will
remain for you and your family from your own injury claim.
It is in your own best interest to notify your
designated counsel representing you in your FELA claim that you are
contemplating bankruptcy. Your attorney can help you so that the claim
does not get omitted from any list of assets. Your designated counsel will
work with bankruptcy trustees and bankruptcy attorneys to handle your
injury case in a way that helps you get the maximum recovery you are
entitled to under the law.
[top]
|
