Bankruptcy

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27 Jun 2013

Bankruptcy results from an accident occurring decades prior

READ TIME

2 min

The nightmare of facing a medical compensation claim is being faced, for the second time, by a potential bankrupt.

20 years ago a driver of an unregistered car caused an accident involving an adult and a toddler. Significant injuries were sustained by the child. As the car was unregistered there was no CTP insurance to cover damages. The potential bankrupt thought that the incident was dealt with appropriately at the time. However, due to a statutory limitation period coming to life, the nightmare has been resurrected.

The child who is now 23 had brought a claim before their 21st birthday against the nominal defendant who in turn now has a claim in excess of $1 million against the driver who is now 45 years old.

Statute says that a minor has three years from their 18th birthday to commence proceedings for an injury claim. In this case the child did so before turning 21 years old, but has only been finalised recently.

As a result the driver is facing potential bankruptcy. Her house may now need to be sold as a result and her financial life will start again from scratch. This appears to be a rare case, however it is important to remember that events that have occurred in the past, and sometimes in the very distant past, can still very much come back to haunt us. This is why it is important to obtain good advice on asset protection as we do not control what may happen in the future.

The lesson here is to protect yourself from past mistakes if at all possible because the ramifications years down the track can be substantial.

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