April 10, 2018
Background:
- October 2007 Debtor had right hip replaced; hip had no issues.
- July 2009 Debtor and wife filed Chapter 7 and received a “no asset” discharge
- November 2009 Debtor told his Doctor that he was experiencing pain in hip joint.
- November 2010 Debtor told his Doctor that the pain was worse.
- January 2011 Debtor had total right hip revision.
- March 2012 Debtor retained attorney against manufacturer of hip
- March 2017 Attorney informed Trustee that Debtor was involved in products liability claim and was offered $235,000 to settle.
- Bankruptcy Court reopened the case to allow the Trustee to administer the recovery.
- April 2017 Debtors amended their claim to list this hip claim as exempt.
- Trustee objected and stated that the doctor’s notes indicated the pain was ongoing for the past six months.
Court Ruling:
- Although the Debtor received the hip replacement before prior to filing bankruptcy, he did not experience problems and/or “medically objective proof” until after he and his wife filed for bankruptcy.
- Debtors’ claims arose post-petition and was not sufficient to be included in the bankruptcy estate. Award from manufacturer was exempt from the Bankruptcy.
- The settlement of $235,000 was not property of the Bankruptcy estate and was the property of the Debtors.
This case was a pain in the hip for the Debtor and turned out to be a pain in the neck for the Trustee.
Each case is different in a bankruptcy and good representation is required before debtors go to Bankruptcy Court.
