A state in which a claimant is involved in an open bankruptcy proceeding.
Context on Express Legal Funding
Active bankruptcy significantly impacts pre-settlement legal funding in personal injury cases. Claimants involved in an open bankruptcy proceeding are subject to additional scrutiny, as the bankruptcy court or trustee often needs to approve any funding agreement. This is because the personal injury claim itself may be considered an asset of the bankruptcy estate. Understanding the intricacies of bankruptcy, particularly chapters like Chapter 7 or Chapter 13, is crucial when assessing the eligibility of a claimant for legal funding.
Significance: Limiting factor; court approval or trustee involvement is often required.
