Filing for bankruptcy can be an overwhelming experience. Many disclosures must be made, and failing to do so can have severe consequences for other legal matters. For example, what happens if you are involved in a personal injury lawsuit after filing bankruptcy? Must you disclose that claim to a bankruptcy court? The following lawsuit out of Louisiana answers that question and shows the consequences that can flow from the failure to disclose.
Helen and Robert Allen (HA) filed for Chapter 13 bankruptcy in 2009. In the five years, the court administered the HAs’ bankruptcy case, the HAs amended their case three times—one year after filing their initial bankruptcy case but before the three amendments. In 2010, Helen filed a personal injury lawsuit that alleged she was seriously and permanently injured when the stool she sat on broke apart.
The defendants in her personal injury case filed a motion for a summary judgment seeking to dismiss Helen’s lawsuit because they contended that HAs didn’t disclose the existence of the filing in their bankruptcy. Moreover, they argued the court should prevent HAs’ personal injury claim from proceeding based on judicial estoppel because HAs did not disclose the lawsuit to the bankruptcy court.