Filing before or after accident settlement

[bigtim6656]

Ok im wanting to file my chapter. 7 in the next few months
In april i was in a car accident damaged my hip and im in the middle of settling with the insurance company.
Im looking at getting between 15-50k depending on my mri im fixing to get. So im trying to figure out if i should file before i get it or after. I went through this before and ended up just not filing. Right now i have no car no house am on ssdi and got bout 500 in clothes nothing else
I moved to colorado where live now so im pretty sure i can file with fed exemtions

So do i file now and hope the bk is done before i get the money file after i get it or what
Also would i be better if i wait to get the money to keep it in cash in an account. Buy stuff i can use my exemption on or have a wild weekend in vegas and blow it lol. My friend said i could go to vegas and say i lost it but idk if that would fly Im pretty sure with the federal exemptions i can use like 30k in wildcard for anything in want. Is that correct

[justbroke]

Do not file yet! Did you know that the bankruptcy includes everything that you were "entitled to receive" before you filed? So if the accident happened before filing and you receive any settlement after filing (even years after filing), it is property of the Bankruptcy estate and subject to distribution based on any exemptions that you may have. The key is that "entitled to receive".

You can't just "go to Vegas" and "say" you lost it. Bankruptcy petitions are done under penalty of perjury and many have actually gone to jail for perjury, just as quickly as they have for outright Bankruptcy fraud.

Indiana does not appear to allow you use the Federal Bankruptcy exemption scheme.

Since you have a lawsuit and potential settlement, your best interest is served by seeking free consultations with several (4-5) bankruptcy attorneys in your State. Please do not listen to your friends or me.

[despritfreya]

Ditto what JB said. Get yourself to a bk attny before you even think about filing and make sure you discuss your pending settlement.

Des.

[bigtim6656]

Im gonna talk to some lawyers soon
I know indiana does not allow the federal exemptions. But in augest i moved to colorado where i lived now. My understanding is i can use the federal exemptions since iv moved to another state

Do not file yet! Did you know that the bankruptcy includes everything that you were "entitled to receive" before you filed? So if the accident happened before filing and you receive any settlement after filing (even years after filing), it is property of the Bankruptcy estate and subject to distribution based on any exemptions that you may have. The key is that "entitled to receive".

You can't just "go to Vegas" and "say" you lost it. Bankruptcy petitions are done under penalty of perjury and many have actually gone to jail for perjury, just as quickly as they have for outright Bankruptcy fraud.

Indiana does not appear to allow you use the Federal Bankruptcy exemption scheme.

Since you have a lawsuit and potential settlement, your best interest is served by seeking free consultations with several (4-5) bankruptcy attorneys in your State. Please do not listen to your friends or me.

[btbeme]

Most attorneys will not even consider taking your case until your lawsuit is resolved. And the ones that would are not the attorneys you want.

Talking to a few will help you get your arms around the rules, perhaps, but filing anytime soon is a - b a d - idea.

[justbroke]

Im gonna talk to some lawyers soon
I know indiana does not allow the federal exemptions. But in augest i moved to colorado where i lived now. My understanding is i can use the federal exemptions since iv moved to another state

Which exemptions that you use, when you move, can get a little more tricky than that. You have lived in Colorado close to the 91 days for purposes of "venue" (where you file).

If you lived in Indiana for more than 2 years more than 2 years ago (e.g. back in 2011 were you already there 2 years), then you may need to use Indiana exemptions IF Indiana doesn't disallow non-residents to use them. It is complex, and I would really want you to speak to some local attorneys that can review both your Venue and your Residency (Exemption) scheme. (I looked quickly, and this is by no means a legal answer, Indiana does not allow non-resident usage of their exemptions, so you would revert to Federal.)

Again, I would have an attorney determine your correct domicile for purposes of the exemptions.

The Federal wildcard (unused homestead exemption) does not appear to be anywhere near $30K. From what I can tell, it is $12,725 for a single debtor (not filing jointly). This is why you need an attorney that knows how to handle your potential (pending) settlement, and can apply the appropriate exemption scheme to protect as much of your assets as possible.

[Blossoms]

Can SSDI even be garnished by creditors? I'm asking because if the OP is judgment proof, as a result of only having the SSDI income, then maybe he or she doesn't even need to file for bankruptcy in the first place?

[justbroke]

bigtim6656 would not be judgment proof. At best, bigtim6656 would be collection proof. I would not make any suggestions since this is a sizeable amount of money and the debtor (bigtim6656) should be using bankruptcy pre-planning through a bankruptcy/asset protection attorney.

But, you overall base question of whether bigtim6656 should file, is probably the right question to ask... I just wouldn't ask "me".

[bigtim6656]

My reasons for filing are A i have 50-70k of debt and my credit is shit. B one day i wont to rebuild my credit and be able to buy a house and such. C i have two judgements im paying on its judt 45 a month but one id total bs and i dont like paying the guy

I guess i shoulda clearified what i met with the wildcard. Between it if i bought a vechile with part of the settlement and my other exemptions it came up to nearly. 30k.
My other reason for filing is i plan to start a business when i get done with my bk. i dont want a creditor coming after me later when i have something to take.

And yes they can not garnish ssdi but they can drag u into court every month if u dont set up a payment plan. So i agreed to pay 30 on one and 15 on the other. Both times the judge said you do not have to pay but the creditor could request s hearing every 30 days.
Which they wanted to. One of the guys tried to say he could take "my" car ss he called it cause my parents let me use one of their cars to drive ever since i wrecked mine a year n half ago

bigtim6656 would not be judgment proof. At best, bigtim6656 would be collection proof. I would not make any suggestions since this is a sizeable amount of money and the debtor (bigtim6656) should be using bankruptcy pre-planning through a bankruptcy/asset protection attorney.

But, you overall base question of whether bigtim6656 should file, is probably the right question to ask... I just wouldn't ask "me".

[bigtim6656]

I moved back to indiana in 2008 in dec 2011 i moved to florida and back to indiana in march 2012 though i never changed my id my mail and ssdi check went to fl while i was there but it was only four months. In june 2013 i moved from indiana with my parents stayed in kansas from july till aug. In late aug 2013 weved into a condo in colorado where we live now iv been on a lease in colorado since late aug so iv lived in colorado for little over 3 months by the time i file it will probably be six months

If indiana does not allow non residents to use their exemption i would fall under federal correct? If so how long can i wait to file before falling under colorados exemption list?

Sounds like i need to wait till iv been here 180 days and am able to exempt anything i buy with the settlement also waiting till after i get it to file correct

[despritfreya]

Quite frankly, your issues (all of them) are too important to try to figure them out on this forum (no matter how good posters are). If you screw this up, you screw up BIG TIME, and, as it relates to filing a Chapter 7, there is no easy out - even if you find one.

Please find a good bk lawyer.

Des.

[justbroke]

Definitely start looking for a good attorney. Don't forget to interview several and pick the one that makes you feel more comfortable. As I wrote earlier, an attorney would help with the venue and domicile issues/questions and come up with a plan for exempting or spending down the settlement. Do not do anything until you speak with a bankruptcy attorney. I don't want you to do something that can't be undone.

As Des writes, these issues are too important for random "guesses" on the Forum.

[daveinIL]

I can tell you from experience (been there, done that) that mixing a BK with an active lawsuit/claim/settlement in progress is not the simplest nor probably the best thing to do. One thing that I didn't see anyone mention is that once you file, the TT takes over EVERYTHING FINANCIAL regarding your estate. What this means regarding a lawsuit is that you can no longer accept or refuse a settlement offer without the explicit and intimate involvement of the trustee. In fact, you can only express your desires to the TT and it is completely out of your hands. The TT can accept a settlement offer on behalf of your estate even if you believe it is not an appropriate offer.

[bigtim6656]

Thanks guys imma met with a few lawyers before doing anything and sounds like i need to wait till after the settlement is done. I think ill met with the lawyers before moving forward on the settlement aswell

Thanks and ill keep u posted