Ismy Chapter 13 trustee entitled to my injury settlement even though I received the settlement 2 years after I filed?

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Ismy Chapter 13 trustee entitled to my injury settlement even though I received the settlement 2 years after I filed?

I filed for Chapter 13 bankruptcy in 2008. Last week, I was told that I would receive $8000 because of an accident that I had at my gym. My attorney informed the Chapter 13 trustee of this settlement. Does she have any right to it?

Asked on August 22, 2010 under Bankruptcy Law, Massachusetts

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

Different states treat the receipt of personal injury settlements differently and the timing of the settlement and the filing will have an effect on the answer.  Although theoretically you have an obligation to report any money that you may have and may receive to the trustee for payment out to creditors, certain states exempt personal injury settlement money from bankruptcy.  I believe that Massachusetts may be one that follows that rule.  But did you choose th federal exemptions over the state exemptions?  Check and see.  And check with your attorney as well for the PI settlement to see if there is any way that you can structure the money out, although it is small for that.  Good luck.


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