Recieving a Settlement after discharge 5 years ago

[Miceleb]

Ok here we go.....I filed chapter 7 bankruptcy back in 2002 in Michigan when i was 21. At that time my mother had died and we filed a lawsuit against her doctor. I told the trustee at the time that we had a lawsuit . Now 5 years later after it is discharged we won out case and are getting out money. The trustee contacted my lawyer and put a hold on the money. My question is....are they going to take all my money? When i filed i only had about $15,000 dollars in debt. My settlement amount for my mothers wrongful death lawsuit was for $60,000. Can they take the whole amount??? How long can they hold it? Thanks for your help guys.

[Miceleb]

Also someone told me they contact the creditors and if they have claims they give them there money back. If not the trustee cant keep it. Is this true? Sorry to keep reposting.

[BKOnce]

No, they can't take all. Prepare to inherit/celeberate.

[Miceleb]

Do you think it will take a long time to get my money? The lawyer is holding it until it is settled in the bankruptcy court??

[SinkingFast]

The Trustee can only take, max, what you Discharged. If you had $15K in debt Discharged, AND all your Creditors file Claims, you'll get $45K from your Settlement.

When an Asset comes available, the Trustee has to notify all Creditors you filed against that money is available. Your Creditors will have 60-90 days to file their Claims. Then the Trustee has to pay everyone that submitted a claim, perform a Final Audit of your Case, and then you'll receive the remainder.

Since you're receiving significantly more in Settlement than you Discharged,............ I don't know if an attny could intervene for you and get the Trustee to only take what's needed to cover 100% of potential Claims. Possibly allowing you to have the remainder, or at least a portion of the Settlement, immediately. You'd have to check with an attny to see.

[marzipan13]

I don't understand... discharged 5 years ago and now the trustee is going to take the money?
i thought if there were any significant increase in assets within 1 year after discharging, the trustee can take... but after that, you are home free.
if you hadn't told the trustee about the lawsuit, do you think he would have never known you got the money now?

so, if i'm discharged and 2-3 years from now I win the lottery, will I have to pay off all my discharged debts?
i thought the whole point of debts being discharged is that they're wiped out and forever gone.
yikes!

[demismom]

Yeah, I thought it was only for 1 year as well - what's up with 5 years????

[SinkingFast]

The Wrongful Death Law Suit evidently commenced prior to the OP filing BK. OP said the Law Suit was disclosed to the Trustee at the time of filing. In that case, any award from said Law Suit is an asset of the BK Estate. Regardless of the time elapsed since filing.

If OP had won the Lottery on a ticket purchased last week,.......... That would not be an asset of the BK Estate at this point.

[Minnymouth]

Your correct SinkingFast, that's the way it works......... the settlement was disclosed during the BK process (no matter when it was paid out)..... so it is part of the bankruptcy....... the Trustee just sit and waited till it was paid out..............

The debtor KNEW the lawsuit settlement was coming - just didn't know WHEN......

On a lottery ticket bought today and you WIN....... if your case is less than a year from being "closed", trustee can "reopen" your case (if the judge allows it) and take your money (asset) to pay creditors.....

Over a year, they judge normally doesn't allow it.......

[Miceleb]

Your correct SinkingFast, that's the way it works......... the settlement was disclosed during the BK process (no matter when it was paid out)..... so it is part of the bankruptcy....... the Trustee just sit and waited till it was paid out..............

The debtor KNEW the lawsuit settlement was coming - just didn't know WHEN......

On a lottery ticket bought today and you WIN....... if your case is less than a year from being "closed", trustee can "reopen" your case (if the judge allows it) and take your money (asset) to pay creditors.....

Over a year, they judge normally doesn't allow it.......

So you think the judge will not allow them to take my money?

[Miceleb]

Another question.......So if i pay my discharged debt back...will they take the bankruptcy off my record because i technically paid the debt?

[SinkingFast]

Another question.......So if i pay my discharged debt back...will they take the bankruptcy off my record because i technically paid the debt?

Nope. Unfortunately, thru conventional channels, once filed, the BK remains on your Credit Reports. Even if you had filed and then had the case Dismissed it would continue to show. With Ch 7, that's 10 years.

However, there are Credit Repair companies, such as Lexington Law, that have had success in getting Credit Reports cleaned up. Including having BK's removed. Something to do with how BK is Verified. Court Houses evidently don't Verify with the Credit Reporting Agencies so Credit Repair companies use that "Legal Loophole" to dispute the reporting.

[keepmine]

[Miceleb]

Ok...so they cant take the whole settlement as long amount discharged in the bankruptcy was less than that of the settlement. Example: I think i filed bankruptcy and i owed 15,000. I am recieving a settlement for the amount of 60,000. Is there any possible way they can get there hands on the other 45,000??????

[SinkingFast]

The Trustee should only take what your Creditors file Claims for. You should get the remainder. It'll just take a while to get thru the process. Probably in the neighborhood of roughly 6 months or so I'd think.