No asset converted to asset

[momtoroxy]

and I don't know why! Hubby was in a car accident back in July. We are awaiting a settlement (hopefully) to cover his medical bills. At our 341, the trustee said he was now in charge of the settlement case. We do not think we'll get anywhere close to the allowed $16,100. Is the trustee changing us to asset just to see what we will get?? Then, if the settlement is under the allowed amount, he'll change it back?

Will this hold up our discharge??

[justbroke]

Yes, the Trustee is in charge. If the amount is under your exemption, then the Trustee won't have anything to distribute.

Now, let me back up and explain why you must have an Asset Case. An asset case declaration warns unsecured creditors that in order to be paid they must file claims. The Trustee must do this anytime there's even the expectation of some money being liquidated through the estate. Right now, you don't know how much your settlement or judgment is going to be. It could be everything from just actual damages and loss of work, to include even punitive and compensatory damages. Since no one knows at this point, the Trustee MUST convert the case to an Asset Case and notify the creditors... just in case. The case designation will probably never be turned back to "no asset". There will just be nothing to distribute.

This is the appropriate thing to do!

This does not affect your discharge in any way, shape or form.

[MSbklawyer]

I concur with J.B. A right to recover money in a personal injury lawsuit is as much an asset as is a car or land or money. Since the trustee has no way of quantifying how much money the suit is worth at this point, he "owns" your husband's right to settle to suit to the extent it exceeds your exemptions. If he investigates and determines that it will all be exempt, he will "abandon" the suit back to your husband.

[momtoroxy]

Thank you so much for the responses. I guess I sort of freaked, thinking it would delay our discharge. We hope to find out soon if we'll get a settlement, but we don't think it will be over the exemption amount.

I appreciate your help!