Can I keep the medical portion of settlement funds? 3 Answers as of May 16, 2016

Can I keep the portion of settlement that was designated for medical bills to myself from a personal injury claim and then file bankruptcy to eliminate these debts? My attorney keeps insisting she can't allow me to do or else she will lose her license.

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Law Offices of George H. Shers | George H. Shers
You attorney certainly could get into some trouble with the State Bar, but I do not think your scheme would even work. When you declare bankruptcy, certain physical assets are protected but the rest is divided up to pay the people you name as creditors [if you do not name them, the bankruptcy has no effect on them]. So the money you save in not paying the medical bills will be paid to your creditors. The medical suppliers will then probably want to charge you interest and will demand full payment, while if your attorney settles with them they may agree to discount the bills some. The creditor could probably claim you were guilty of a fraud, as you know the money was supposed to go to them and you took it instead. People who are too clever often get caught in their own plans.
Answer Applies to: California
Replied: 5/16/2016
Law Ofices of Edwin K. Niles | Edwin K. Niles
Yes, you are asking her to do something unethical. Furthermore, she has probably signed a lien form making her personally responsible.
Answer Applies to: California
Replied: 5/16/2016
Pius Joseph A Professional Law Corp. | Pius Joseph
If there are liens on the settlement signed by the attorney , then the attorney has a fiduciary duty and she will have to pay the liens on your behalf. You can opt not to pay non lien items. I suggest you follow the attorney's advice which is a safer course.
Answer Applies to: California
Replied: 5/16/2016
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