Workers’ injuries can have overwhelmingly devastating consequences for both the injured and the family involved. Especially if the injured person is the breadwinner of the household, financial strain can be significant for the whole family. On the job injuries can result in hugely expensive medical treatments, as well as lost wages for the injured.

Bankruptcy is often in the minds of injured employees when they are unable to keep up with the financial responsibilities that come with running a household. When the creditors are chasing after the injured worker, it might be worth it to file a claim for worker’s compensation benefits.

Bankruptcy Exemption Laws in Maryland

In the case of bankruptcy in the state of Maryland, the law protects some of the injured person’s assets under the authority of Maryland’s Bankruptcy Court. These exemption laws state that creditors are not to go after certain assets regardless of the amount of money the injured person owes.

The law also states that an injured worker has the right to receive worker’s compensation benefits that are unavailable to creditors. Any other lump-sum award moneys are also exempt from the reach of creditors. This award money should always be kept in a separate account from the worker’s other money. The law does not define a limit on the amount of this exemption. However, proper handling of the worker’s compensation case is of essence in order for the exemptions to work.

The fact that an injured worker is entitled to worker’s compensation from an on the job injury does not mean the individual can hide the existence of such benefits. The law when filing for bankruptcy in the state of Maryland requires full disclosure of all benefits.

The documents required in order to claim worker’s compensation benefits are called Schedules of Assets and Liabilities. The injured worker in this case must fill out Schedule B, which is the list of assets he owns, including worker’s compensation benefits, and any unpaid benefits as well. Schedule C of the form is where the debtor lists the assets that are to be exempt. Failure to properly fill out these forms can result in the loss of benefits, as well as the loss of the right to claim the exemptions. This is why it’s very important to contact a qualified worker’s compensation bankruptcy attorney to handle these types of complex cases.

Bankruptcy is a resource of last resort in cases when a worker is unable to fulfill his debt obligations due to an on the job injury. However, it could very well be the necessary measure that the worker needs. Injured workers should not have to go through the burden of losing worker’s compensation benefits due to bankruptcy. It’s important to note, however, that the help of a qualified attorney is vitally necessary due to the technicalities that this process entails and to avoid any errors that could result in the loss of such benefits.