Does a personal injury settlement go into a trust account?: In furtherance to a previous post, I would like to know if a Ch. 7 trustee places a personal injury settlement into a trust account for the estate AND does the account gain interest AND if so, who keeps the interest? I settled a lawsuit after I filed for bankruptcy and, of course, the trustee quickly took possession. After a minor fight, the judge awarded me the settlement money minus the trustee's fees and some exemptions. We had/have a major hardship. It has been 6 mos since the ruling and trustee has yet to file is fees w/the court for approval so I was wondering if he will be rewarded [thru any interest from the settlement] by sitting on our case.
Louis's answer: You need to consult with your bankruptcy counsel. The answer is more complicated because it will depend upon whether your counsel advised you on exemptions relating to personal injury claims and settlements. You should review your Schedule B (personal property) to make sure the personal injury claim was properly disclosed, and Schedule C (exemptions) to determine the extent of any exemptions claimed. Did you disclose and exempt the claim? If so, how much did you exempt versus the amount paid? Did the trustee object to any claim of exemption? If the Trustee is retaining the settlement, because it was no claimed as exempt, the Trustee will take as long as necessary to process claims of creditors, object to any claims there may be, complete further investigations, ultimately disburse funds to creditors based upon their claims, disburse money to administrative claimants after the court approves of all fees and costs, and then after all of that, if there is any money left over that was not paid out and was not exempted, you will be paid. It could take months or even years! If the Trustee is holding funds that are exempt, you need to consult with your bankruptcy counsel to have the Trustee release exempt funds. Good luck. Hopefully you retained competent and well respected bankruptcy counsel. Louis J. Esbin Certified Bankruptcy Specialist - State Bar of California.
School goes Bankrupt, new school takes over and wants to collect debt of bankrupt school. Can they do this?: School went bankrupt in August of 07, new school took over in Septmber 07. New school enters into an agreement with students that they will accept the credits taken, etc. and run the course of classes, etc. as it was left off. New school wants to collect debt of old school with cash payments and says that it can't be rolled into financial aid. Sounds fishy... Graduated and now they are holding dipoma until we enter into an agreement of cash payment for bankrupt schools debt. Didn't bankrupt school void its financial contract? How can new school have rights to collect bankrupt school's debt? I just want my diploma and will do whatever is legal/right. Thank you.
Louis's answer: The answer to the question lies in what was actually authorized by the Bankruptcy Court. You will need to find out what the new school actually purchased from the bankrupted (debtor) school. Once you have that information you will know better what your rights and remedies may be. It is possible they purchased the assets that included the accounts receivable, but even with that, the terms of what the court authorized are critical. Is it possible the new school is merely the reorganized old (debtor) school that retained all of its assets, including the accounts receivable? Certainly, more certain facts need to be known, and you may want to look at the court record for the old school. Good luck and best regards.
Can I file for chapter 13 if my home is about to be in foreclosure and I dont currently have a job but receive unemployment?: Can I file for chapter 13 if my home is about to be in foreclosure and I dont currently have a job but receive unemployment?
Louis's answer: The answer to this question must take into consideration more than just your regular monthly income, which unemployment in most Circuits makes eligible, but also the amount of your outstanding matured, liquidated and noncontingent unsecured and secured debt. Chapter 13 has certain debt limitations for each. If you exceed these debt limits you may not be eligible for Chapter 13. if you file and have insufficient income to fund a Chapter 13 plan you may find an objection from a creditor or the trustee to good faith of the filing. Be careful of attorneys or paralegals who may offer to file merely to stop a foreclosure sale and do not follow through. If a case is dismissed and you want to refile, you may find that the automatic stay is not permanent, but limited in duration.