Filed Ch 13 in AZ over a year ago, now in auto accident!! QUESTIONS >>

[psa10]

Live in AZ, filed a CH 13 BK almost a year ago, trustee still has not finalized BK plan as of yet, not sure what the story is with that but that will be another topic for a later time I guess, you would think that with the downturn in BK filings that the BK Trustee would be better able to manage his/her case load. Was involved in a auto accident a few weeks back, have neck injuries and back pain. Question is this, how is an auto accident the bankruptcy courts business? I understand that these are possibly funds that are getting turned over to creditors but I am not going to be the one to turn funds over. I was the one injured here, not the court and now I am being advised that if I obtain any sort of a personal injury settlement that I will have to turn these funds over to the BK Trustee? Really?

Question is this, how does a trustee know if someone is in an auto accident? I assume that we are just on the "honor system here when it comes to things like this? I have been heard of this sort of a situation before where a person gets injured, possibly goes months through physical therapy and then turns over all funds to a bankruptcy trustee? In my opinion this is OUTRAGEOUS!

Any opinions here would be appreciated. I spoke to my BK attorney a few weeks ago and from the way my attorney was going on and on here was that it was the end of the world!

[psa10]

Guess worse case scenario here is that I could just move to dismiss my bankruptcy case in full and let the creditors come after me. Could stop making payments to the trustee's office and save the money. It will be really hard to collect a penny from a person making only $9.00 an hour! Probably what I will need to have happen in this case. My attorney seems to be working for the trustee anyways!

[despritfreya]

psa,

Your attny is not working for the trustee. He is trying to point you in a direction that will keep you out of jail. Regardless of the "lack of fairness", all after acquired assets are the property of the bk estate. The cause of action (the claim you have due to the auto accident) is property of the bk estate subject only to your allowed exemption in 75% of your lost wages recovery claim.

If you decide not to disclose this asset your attny will have an ethical duty to withdraw from your case since, as an officer of the court, he cannot represent you knowing you are committing a fraud upon that court.

If you decide not to disclose and proceed in the 13, if the Trustee finds out, you will risk everything, including your freedom since bk fraud is a federal crime.

Your choices are as follows:

1. Move to dismiss your case and once dismissed deal with your creditors on your own. (Should a creditor sue you before you settle the PI claim, understand that the proceeds of that claim may be subject to garnishment- although such rarely happens.)

2. Remain in the Chapter 13, amend Schedule B to add the cause of action, find a good PI attny, get the attny appointed by the bk court to represent you and let the attny proceed to probably settlement. The settlement will need to be approved by the bk court. You and your bk attny can work with the Trustee (I assume RB) to see if he will agree to share some of the proceeds (over your exempt lost wage claim) as compensation for your time in helping to settle the matter.

In the end, you are the client and you get to decide how to proceed. If you don't "follow the law" your attny should (and probably will) withdraw.

Des.