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I am in chapter 13 and getting a worker comp settlement will they take it

Syracuse, NY |
Filed under: Chapter 13 bankruptcy

I am in my last year of chapter 13 . I was under worker comp before I file but only 6 months and didn't think I would be getting a settlement , but 4 years later they offering me a settlement .. I am not paying 100 percent back ... So will they take it from me

Attorney Answers 5


  1. Yes, you are required to inform the trustee about it and they will pay off whatever the balance owed to the creditors is and if there is a remaining balance it will be paid over to you.


  2. If you disclosed the workers compensation case & found an exemption for it on Schedule C, then you should be able to keep this award. If an exemption is available & you didn't use it, then file an amendment right away. Not all states allow an exemption for workers compensation benefits, but many states do allow this as an exemption. A link to a general description of exemption laws is below. Hope this perspective helps!


  3. Workers compensation payments are exempt from collection. The only issue will be that your disposable income will increase resulting in a potential of a greater monthly plan payment.

    Of course if you expenses also increase, you may be able to offset this increase in income.

    Answers are provided for direction only; it is not a substitute for an office consultation.


  4. First issue is if not listed in Schedule B amend it and list said asset and the value. Secondly, amend Schedule C to list any exemption available in it including any available other sections what us attorneys call "wild card" exemptions. Third, notify the trustee that you expect this settlement approximately as of what date. If exempt, or such portion as is exempt, you should be able to keep it. But creditors have a right to object up to 30 days after any amendment is filed so file it right away. Employ an experienced bankruptcy attorney which they are here in AVVO in your state even for just advice , but I recommend for the duration possibly of your case. They can assist you in filing the necessary schedules and what next to do or to reply to any comments or requests by the trustee also. Good luck


  5. There are many exempt assets in the bankruptcy law. Exempt assets are those you are allowed to keep, safe from creditors, with or without bankruptcy. Workers Compensation payments fall into this category. In other words, the trustee will not make a claim for these assets as they are "exempt" and cannot be touched.

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