When a truck accident takes place, what happens following the accident can be confusing for all the parties involved. An accident does not only inflict physical injuries but lifelong emotional trauma and financial burdens. The situation can become even more complex if the trucking company declares bankruptcy, which is common in Iowa.
Bankruptcy can make it difficult for the victim to recover their damages if the company is found to be liable for the accident. This is because filing for bankruptcy will allow the company to protect itself from paying debts, including personal injury claims from victims. In many cases, all the legal procedures are halted until the company resolves its financial problems.
If you find yourself in such a situation, you may be scared about the uncertainty of your future. It is important to know that you are not alone. A truck accident lawyer in Des Moines will know the best action to pursue. For instance, they might try to get you compensation from other potentially liable parties, such as the truck driver. Read the article to know more.
What happens to the ongoing legal claims when a trucking company files for bankruptcy?
When you file an accident claim against a trucking company to recover your damages, and they file for bankruptcy, there are immediate consequences to that, especially for legal claims. Once the defendant has filed for bankruptcy, all the legal proceedings are stopped or paused by activating the automatic stay.
This means that even if you prove with evidence that the trucking company is liable and owes you money, you cannot collect it unless the bankruptcy case is closed or the automatic stay is lifted. This is a major problem for those victims who rely on legal compensation to pay for their medical expenses and other damages.
Can victims still pursue compensation after bankruptcy declaration?
Despite the issues caused by a bankruptcy filing, victims of a truck accident may still be able to recover their damages. For one, you can wait for the bankruptcy case to conclude. Depending on the specific facts of your case, you may still be able to recover damages.
If you can demonstrate with evidence that your claim is covered by the debtor’s insurance policy, you may be able to claim damages even when the debtor is in bankruptcy. However, the process can become complicated, and the amount may also be less than what your damages are worth. This is because the insurance policy’s coverage may not cover it all.
Can you file an insurance claim against the trucking company?
Victims may wonder whether they can recover their damages by filing a claim against the trucking company’s insurance policy. Such insurance is designed to cover bodily injuries and property damages caused by accidents. If the truck driver is found to be at fault, the injured parties may receive financial support for medical expenses, property damage, and other losses.
It is also important to note that even in bankruptcy, insurance coverages are typically unaffected. The insurance remains valid and operational, allowing victims to recover compensation. While bankruptcy can complicate the situation, it does not put an automatic stay on the trucking company’s insurance policies.
However, the insurance does come with specified limits. For example, insurance policies often include limits per accident and per person, which may reduce the amount paid out in cases of substantial damages. If your medical expenses exceed those limits, you may find yourself undercompensated. Moreover, once you finalize a settlement, you will not be able to file a lawsuit even after bankruptcy.
Facing uncertainty after your accident?
A truck accident can be one of the most traumatic incidents of your life. Not being able to recover compensation can worsen things. Hire an experienced attorney in Iowa today!
