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If i receive a large sum due to a work injury while filing bankruptcy does it get taken to pay creditors?

Whittier, CA |

I filed bankruptcy in Ca & i have my court date Sept and my discharge is in November however i would receive monies some time in Oct.

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Attorney answers 5

Posted

It doesn't matter when you filed, it was your right to receive work comp on the date you filed that counts.
Most states have exemptions for work comp.
Some states like Illinois have a 100% exemption.
You need to check with California counsel as to exemption you are entitled to.

Posted

You were required to list the pending court case on your bankruptcy petition. If you attended your meeting of creditors you should have been asked if you listed all of your assets on your petition. Pending claim for personal injury (called a "cause of action") is an asset of your bankrutpcy estate. Whether the proceeds will be taken to pay your creditors depends on whether you can exempt it after you have filed the required amendment to list it. You should speak to an attorney as soon as possible. Failure to list all of your assets on your bankrutpcy petitoin can result in the denial of your discharge and/or a criminal proceeding against you.

If you found this answer helpful, please let me know by clicking the "Mark as Helpful" button or "Best Answer" at the bottom of this answer. Although I'd welcome an attorney/client relationship with you, my comment here does not create one. Our firm is a debt relief agency. We help people file for bankruptcy under the United States Bankruptcy Code.

Posted

My colleagues are correct. Your work injury case was an asset when you filed your case. It sounds like you just filed the bankruptcy. You still have time to amend the petition to add the work injury claim and attempt to exempt it. You should contact the attorney you filed the bankruptcy with to help you in the aspect. If you do not have an attorney, I would highly recommend that yo sit down with one to make sure that your assets can be exempted. I do not know how much you are receiving from the claim, but if it is a very large amount, one option is to let the bankruptcy case get dismissed and pay off your debts.

Again, I think the best thing for you to do is to sit down with an attorney and explore your options.

Asker

Posted

The total amount being awarded after lawyer fees is $21,500.00 do i still need to amend? I have done some research & it states that under Personal Injury awards are exempt up to $22,075 CCP703.140(b)(11)(D). is this correct. I left my attorney a message i'm waiting for a return call, but my concern is because my discharge on my bankruptcy is in Nov & Court is in Sept. however i would receive the money from my injury early Oct.

Rex Tran

Rex Tran

Posted

You will still need to amend your petition to include the value of your injury claim. I am not sure what type of claim your case was, whether it was personal injury, workers comp etc. There is not enough information to provide you with an answer. Your attorney should be able to look at what exemptions have already been used to determine whether the personal injury exemption is applicable in your case. There are many factors when determining what exemption can be used and the amount. e.g. equity in your home, type of claim, amount of wildcard exemptions used, the amount received for pain and suffering, the amount reasonably necessary for support and the list goes on. These are things that an attorney familiar with your case can help you navigate.

Asker

Posted

It is a personal injury case. Im filing Ch 7 bankruptcy. Well thank you for the info.

Posted

If your injury was prepetition, then the claim that you have to receive payment in the future was an asset that needed to be disclosed on your bankruptcy paperwork. If the payment that you're going to receive is a Workmen's Compensation claim, then it's important that you take advantage of any exemptions that may be available in your state for protecting Workmen's Compensation claims. If you're right to receive payment is something other than Workmen's Compensation, I recommend that you meet with your attorney, or if you are not represented, that you meet with an attorney immediately, even before your meeting of creditors, to ascertain what your rights and responsibilities would be with regard to this injury claim. Do not wait another day to set up an appointment to meet with an experienced consumer bank's attorney. Good luck!

Posted

Pursuant to periodic adjustments, both primary and secondary bankruptcy sources are often not updated with regard to bankruptcy exemption values. For instance, the cited CA personal bodily injury bankruptcy exemption allowance (mentioned in one of the comments) is not up-to-date. Different bankruptcy exemptions may be applicable to any particular asset. Disclose, amend and exempt prior to the chapter 7 bankruptcy meeting of creditors. The bankruptcy filer eligible for California bankruptcy exemptions benefits from fairly generous allowances, but their application isn't straightforward. For (as of now) current discussion of bankruptcy exemption highlights see my chapter 7 bankruptcy page and bankruptcy blog.

This answer (by San Diego bankruptcy attorney, Asaph Abrams) doesn’t address all facts & implications of the question; it’s general info, not legal advice to be relied upon and exceptions may apply. It creates no attorney-client relationship; it may be pertinent only to CA and/or its Southern District Bankruptcy Court in San Diego. It’s independent of other answers. It may be time sensitive, as in past the “Use by” date: laws and case law change. Hire a bankruptcy lawyer before acting or refraining from bankruptcy or other legal action.

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