Beware Bankrutpcy

In representing an injured party, you have to be careful of bankruptcy issues.  I have noticed lots of time that either from lack of knowledge or some other reason an injured parties’ bankruptcy attorney will fail to ask them about possible pending suits or claims they may have.  This may lead to the claim being judicially stopped.  The Fifth Circuit has identified three requirements that must be met for judicial estoppel to apply: (1) the party is judicially estopped only if its position is clearly inconsistent with the previous one; (2) the court must have accepted the previous position; and (3) the non-disclosure must not have been inadvertent.  In re Superior Crewboats, Inc., 374 F.3d 330, 334-335 (5^th Cir. 2004) (emphasis added). A debtor’s non-disclosure is “inadvertent” when, in general, the debtor either lacks knowledge of the undisclosed claims or has no motive for their concealment.  Kirk v. Pope, 973 So.2d 981 (Miss. 2007).  In any personal injury case, it is extremely important to find out about prior bankruptcy filings and to advise clients to contact you if they find it necessary to file for bankruptcy.  Unfortunately, many times an injured party has to file bankruptcy due to the pending medical bills when they do not have health insurance.