If we filed for Chapter 7 and my wife is due to get a large settlement for a wokers comp injury, will they take all the settlement?
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If we filed for Chapter 7 and my wife is due to get a large settlement for a wokers comp injury, will they take all the settlement?
Asked on June 9, 2012 under Bankruptcy Law, Virginia
Answers:
Janet Martin / Janet Martin Attorney at Law
Answered 12 years ago | Contributor
wow, if you can help it wait for the settlement before filing bk. then spend it before filing bk (do not pay down any debts).spend it on stuff you need anyway, maybe make some prepayments a month in advance to utilities, phone, rent, etc. Stock up on non perishable food. take a vacaton under the radar, just don't buy anything that would be an asset that will be part of your bk assets the trustee will sell. It is definitely an asset, just now it is called an account receiveable. After you get it it is cash. This is important to preplan your bk like this; talk to a local bk attorney about your state exemption amounts and the money can be used to fit into those categories you are not using already.
Also, you have a strategic possibility of the husband filing bk and not the wife, or long before the wife. If wife only is entitled to the settlement potentially that should be excludable from husband's expected income.
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