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Can I file for Bankruptcy Protection if I have an Alabama Workers Compensation Claim?

Can I file for Bankruptcy Protection if I have an Alabama Workers Compensation Claim?

I wish that this question was never asked by one of our Alabama Workers’ Compensation clients, but it does occur.  For those workers who have suffered serious job injuries, treatment can stretch out for months and months.  During the time the injured worker is receiving medical treatment and trying to recover, all they are legally entitled to receive is 2/3rd of their Average Weekly Wage (ttd benefits).  It is hard to keep your head above water for long if you are only receiving 2/3rds of your average wage but still have to pay 100% of your monthly bills.  And that is in a case where liability has not been denied.

So, can workers who have suffered a work injury and has an Alabama Workers Comp claim file for Bankruptcy?  The answer is yes, you can file for protection under the Bankruptcy laws, but it is vital that you do everything the U.S. Bankruptcy laws require so as to protect your workers compensation benefits.

Alabama Workers Compensation benefits are except from any bankruptcy filing (see Ala.Code §25-5-86), which means that workers comp benefits cannot be seized to pay your debt in a Bankruptcy filing.  Having stated this, a worker who suffered a work injury can waive their right to said exemption if they do not inform the Bankruptcy Court of their right to Alabama workers comp benefitsSO ALWAYS BE SURE TO INFORM YOUR BANKRUPTCY LAWYER ABOUT ANY ALABAMA WORKERS’ COMPENSATION CLAIM YOU HAVE.  Any exemption not claimed could be deemed waived, and then your debtors may be able to claim a right to your workers comp benefits.

Additionally, you cannot settle your claim or take the case to trial without first obtaining approval from the Bankruptcy Court.  Failure to obtain this approval could also open an injured worker up to having any compensation received in their Alabama workers’ compensation claim seized by debtors.  With this in mind, if you have filed for Bankruptcy, or think you may have to, then it is imperative that you have the assistance of an attorney whose practice focuses on Alabama workers compensation cases.

If you are employed in Alabama and have suffered a job injury and you have questions about your right to Alabama Workers Compensation benefits, don’t hesitate to contact and speak with one of the experienced attorneys at Powell and Denny today for a free consultation. Appointments are available in person, or virtually via Zoom if more convenient.

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Alabama Workers’ Compensation Attorneys

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Powell and Denny have been selected as one of the Best Law Firms by U.S. News and World Report for each of the last 9 years, have been selected as one of Birmingham’s Top Lawyers by B-Metro Magazine for the last 5 years, have been selected by The National Advocates as one of the Top 20 Workers’ Compensation Firms (plaintiffs) and Powell and Denny, P.C.-has been selected as one of the “Best of the Best” law firms by The American Registry and included in the list as one of the Mid-South’s Super Lawyers.

Mr. Denny is AV rated by Martindale Hubbard (the highest rating possible) and Mr. Powell has been rated as Superior by The National Registry

+ Powell and Denny have successfully represented injured workers from Birmingham, Huntsville, Florence, Muscle Shoals, Tuscumbia, Athens, Decatur, Town Creek Ardmore, Hartselle, Madison, Toney, Scottsboro, Ft. Payne, New Hope, Guntersville, Albertville, Boaz, Ashville, Anniston, Gadsden, Cullman, Jasper, Gardendale, Morris, Kimberly, Centerpoint, Leeds, Tarrant City, Fairfield, Hueytown, Bessemer, Adger, Tuscaloosa, Cordova, Alabaster, Pelham, Harpersville, Opelika, Phenix City, Montgomery, Clanton, Calera, Enterprise, Monroeville, Mobile, Evergreen, Dothan, Alabaster, Pelham, Castleberry, Trussville and towns and cities in between.


Can I file for Bankruptcy Protection if I have an Alabama Workers Compensation Claim?

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