Strategy
Avoiding Bankruptcy During a Personal Injury Lawsuit
• 2 min read
Bankruptcy during a pending injury claim creates serious complications. Funding can sometimes prevent it.
Filing bankruptcy while a personal injury claim is pending creates serious complications: the claim becomes an asset of the bankruptcy estate, and the trustee may control settlement decisions.
Disclosure failures (forgetting to list the injury claim in the bankruptcy schedules) can result in judicial estoppel — the claim can be barred entirely.
Pre-settlement funding can sometimes prevent the financial crisis that drives bankruptcy filings during injury cases. It's not a cure-all, but it's a real tool.
If bankruptcy is unavoidable, talk to both your PI attorney and a bankruptcy attorney before filing. Coordination matters.
AARC funds qualifying cases with no credit check, no monthly payments, and no recourse if the case loses.
Call (800) 297-3834 to see if funding can help you avoid filing.
Frequently asked questions
- Should I wait for my settlement instead?
- If you can comfortably cover your bills, waiting is often the cheaper option. Funding exists for claimants who would otherwise be pressured into accepting a low early offer.
- Is a pre-settlement cash advance a loan?
- No. It is non-recourse funding tied to your personal injury claim. There are no monthly payments, and if your case does not recover, you owe nothing.
- Do I need good credit or a job to qualify?
- No. AARC does not run a credit check and does not require employment or income verification. Approval is based on the strength of your claim and your attorney's representation.
- How fast can I get funded?
- Most approved applicants receive funds in as little as 24 hours once AARC has the case documents from your attorney.
- How much does it cost?
- AARC uses a flat fee rather than compounding monthly interest. Typical advances are $500, $750, or $1,000, and the illustrative payoff at settlement is 2x the advance amount.
About the author
Written by the funding team at AARC — Accident Advance & Resource Center. AARC underwrites pre-settlement cash advances for personal injury claimants and works directly with plaintiff attorneys across 45 states. Our team reviews case documentation daily and writes from that firsthand experience.
This article is general information, not legal or financial advice. Always confirm details with your attorney. Contact AARC or call (800) 297-3834 with questions about your specific case.
