Can Bankruptcy Affect a Wrongful Death Lawsuit?

Maryland Lawyer Explains How Personal Injury and Bankruptcy Law Intersect

Recently, a wrongful death lawsuit involving a Baltimore church van was halted by a bankruptcy filed by the pastors of the Victory Outreach Baltimore Church. Five people died when the van sped off the highway and crashed, leaving only ten survivors. The victims’ family members filed a lawsuit against the church, but due to the bankruptcy claim, compensation for the victims’ families will have to wait until the bankruptcy is resolved.

This sad news item gives us the opportunity to reflect on an important question: How can bankruptcies affect a wrongful death lawsuit?

How Bankruptcies Can Impact Wrongful Death Lawsuits

In the case of the Baltimore church van, the lawsuit was halted in part because the pastors had petitioned a US Bankruptcy Court the day before the wrongful death case was filed. A bankruptcy filing, with limited exceptions, puts an automatic stay on most civil proceedings; however, civil proceedings often continue after a bankruptcy is discharged.

In some cases, if the wrongful death suit is unsuccessful in proving negligence, then a bankruptcy court may allow a discharge of negligent damages. This is because bankruptcy laws allow for the discharge of damages under certain situations. However, the courts are unlikely to discharge gross negligence, such as drunk driving accidents involving the deaths of passengers.

What Happens After I File Bankruptcy?

In Nebraska, a daycare provider was accused of the death of a 13-month-old baby, and the victim’s mother brought a lawsuit against the provider. The provider filed for bankruptcy, thus putting a stay on the wrongful death claim. The lawyer for the defendant’s mother advised her that the case should be dropped if the bankruptcy discharges any monetary award that she could get in the wrongful death lawsuit.

Clearly, the power of an automatic stay from a bankruptcy can trump many wrongful death lawsuits. A lawyer will have to build a strong case to prove gross negligence for a wrongful death lawsuit to defeat the automatic stay and ensure compensation for the victim’s family.

If you have any questions or concerns about bankruptcy, or if you wish to proceed with bankruptcy, please consult a bankruptcy attorney in Maryland or Washington DC. Together, we will find a solution that fits your needs best.

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