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Will all money that is awarded in a personal injury claim go to the trustee if the lawsuit was filed a year after our chapter13?

Shreveport, LA |

We filed chapter 13 in 2007 then in 2009 my spouse was injured and lost his job so we filed a lawsuit. We also had to modify the chapter 13 plan to lower our monthly payments and surrender out vehicles. The trustee said the lawsuit payment will have to be sent to him to pay our debt, which is ok because it is our debt but what if we are discharged and have finished paying our payments in the plan before the lawsuit is finish, do we still send him the awarded money if there is any? What will be paid with this money and are we still going to owe for the vehicles we surendered?

Attorney Answers 2


When you get your discharge that will take care of the remaining unpaid liability for the vehicles. Even when your Plan is at an end the case will remain open until the lawsuit is resolved if you have to surrender the proceeds to the Trustee.

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Disclaimer: This answer does not constitute legal advice. I am admitted in the States of New York, New Jersey and Massachusetts only and make no attempt to opine on matters of law that are not relevant to those three States. This advice is based on general principles of law that may or may not relate to your specific situation. Facts and laws change and these possible changes will affect the advice provided here. Consult an attorney in your locale before you act on any of this advice. You should not rely on this advice alone and nothing in these communications creates an attorney client relationship. The opinions expressed herein are those of the author only and the fact that he has worked as an Assistant District Attorney; State Supreme Court Clerk; Special Assistant United States Attorney (Hawaii); Assistant Cornell University Counsel or Judge Advocate, United States Marine Corps should not be relied upon to assume that these statements reflect the policy of these organizations.

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Even if your Chapter 13 is closed when you receive your settlement money, if you fail to turn over the settlement money to the Trustee when you receive it, your discharge can be revoked, which would mean you would still be liable for the debts listed in your bankruptcy.

There may be other options open to you, so discuss your concerns with an experienced bankruptcy attorney.

Good luck!

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