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Detroit auto accident victims not immune from Motor City’s bankruptcy woes

November 5, 2013 by Steven M. Gursten

Federal bankruptcy judge says car accident victim who was injured when Detroit Police car caused a crash  must wait, like other, to collect judgment

After being seriously injured when a Detroit police car crashed into him, Ann Arbor resident Michael Beydoun probably thought the hardest part of seeking justice was fighting the city of Detroit in court to win a $2 million judgment for his injuries and pain and suffering.

Then, the Detroit bankruptcy happened.

Now, Beydoun and other Detroit auto accident victims who were injured as a result of negligence on the part of Detroit employees must wait in line with the city’s other 100,000 or so creditors to collect their judgments, according to reports from The Detroit News and the Detroit Free Press.

In response to a motion filed by Beydoun seeking permission to collect on his judgment against Detroit, despite the bankruptcy court’s automatic stay on legal proceedings against the city, U.S. Bankruptcy Court Judge Steven Rhodes issued the following ruling:

“When an unsecured creditor like Beydoun seeks relief from the automatic stay to pursue collection from a debtor, there is significant potential harm to other creditors, because if successful, the creditor will be paid in his claim and promptly so, while other creditors are stayed … This would be fundamentally unfair to them regardless of the asserted grounds for relief.”

As is frequently the case for auto accident victims who must turn to the courts for justice, the Detroit bankruptcy just adds insult to their injuries.

And remember, if you have a past or present auto accident claim with the City of Detroit, either for Michigan PIP benefits or a claim for pain and suffering (such as if  you were involved in a car accident with a City of Detroit police car or bus), please read our recent blog post:

Attention: Important warning on Detroit bankruptcy for auto accident victims

It has information on three important steps Detroit auto accident victims must take to preserve their legal rights.

 – Photo courtesy of Creative Commons, by Ken Teegardin

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