unexpected money

[tjrob]

I filed ch7 on May 6th and had 341 on June12th. At that time I had not much of anything. On Feb 12th, I was injured on the job and during the week of June 12th, I filed an insurance claim for my injury and to my suprise they paid my claim for a large sum of money. I did not know my claim would be paid until I recieved a check this past Monday(7/11). When I filed the claim, I did not bother to tell my lawyer because I thought the insurance company would deny my claim and would have to fight for it for a long time. My discharge date is August 8th just 4 weeks away so what do I do? When I met with my lawyer after filing, she told me if I had any real estate or money hidden that she did not want to know about it. I opened up a savings account at the bank where I have my checking and deposited the check. At the 341 meeting I did not have to provide bank statements for my checking but I was only asked if I had a checking and how much was in it. My friends say not to say anything but I don't want to do anything wrong! Since I am this far along in my bankruptcy, can I keep the money without having to pay creditors or will I have to pay everything off? Does the trustee or court search all the banks in my state on people who file looking for accounts that people hide. What do I do??????? Tell my lawyer or not???? If I don't say anything, will anyone find out???? I wish I had gotten this check 6 months from now!!!!!!!!!!!!!!!!

[FloridaGirl]

I doubt they will go looking for any hidden assets. Did you file the claim before your 341 meeting? I'm sure they won't go looking, but if they do, they might say the whole thing looks a bit shady. If you filed before your 341 and didn't tell them of the possibility of receiving a payment, they might look at that as fraud. If you filed your claim a day or so after your 341 meeting, they might look at that as fraud too, saying you purposely filed your claim after you filed for BK so it couldn't be taken away. I really don't think anyone will go looking into your assets, but it could happen. I'm not going to tell you to sit back and not say anything. I really don't know the law as far as assets received shortly after filing BK. One of the moderators can tell you what you should do. From a court stand-point, it seems like you filed your claim after your 341 on purpose. I know that isn't the case, because if you were trying to be shady, you wouldn't be concerned about whether or not to tell about you settlement. I hope you are able to keep your money.

[tjrob]

Does anyone know if I can revoke my petition for chapter7 even though I'm 4 weeks away from discharge?? If I can, I figure I could sign with a debt mediation company and pay off debts for a fraction of what they are and use my settlement money to pay. I think this could solve my problem. If I tell my lawyer about all of this, could she tell the bankruptcy court everything I tell her or does she have to ask my permission first??? Thanks.

[FloridaGirl]

Wait....I think you might be worrying too much. Your case is on it's way to being discharged. If the trustee is going to investigate your assets further, you probably would have received notice by now. I think you will be fine. Why would you want to have your BK dismissed after paying the money to file, only to then have to re-pay your debts with credit counseling? Your credit will take a hit either way you go. You are so close to discharge and I'm sure everything will be fine. You are lucky in the sense that the courts are swamped right now, and probably don't have time to look into each person's assets.

What this boils down to is what you feel you are morally obligated to do. Look, I know you might be feeling a bit guilty about receiving all this money after filing for BK. You might feel like you are responsible for paying your debts back now that you can. But those debts are about to be history. You didn't have that money when you filed, and you didn't know you would be getting it. I think God gave you that money so you can have a nice, fresh start. I think that is why you got hurt when you did, as opposed to months sooner, Had you been injured months sooner, and received you settlement months before you filed BK, then the money would have been a factor. But now, it is after the fact. I don't think you should use a good part of it to pay back debts you have already gotten out from under. Use that money in a positive way. Use it in a way that ensures you won't ever need to file for BK again.

But, yes, you can put a stop to your BK. If you really want to spend the money you received due to an injury which probably caused you pain and lost wages, then go to the court house and file the papers. If you feel that is what you need to do, so be it. But I really don't think you should feel guilty for having this money. You should feel happy that you are getting a better fresh start than most who file.

[lilkim]

floridagirl, i agree with you 100%, he is very fortunate to have recived this money, i wish i could be that lucky.lol

i go in about an hour to sign my paperwork with my lawyer to get this all started, and i am so nervous.i am in sc and scared they may try to take my home or even some of our land. do you think i should be worried?

[FloridaGirl]

Well, no matter what, I'm sure you will worry anyway. At least until your BK is discharged. Many people file BK and are able to keep most of their assets. It all depends on how many assets you are talking about. If you have thousands and thousands of dollars worth of land, it is possible that the trustee might force you to surrender some of it to pay back your debts. You will probably be able to keep your house depending on the rules of your State. In any event, if you have to give up some of your land in order to have a fresh start, that's not so bad. You can always get what you lose back, in time. I would tell you to trust what your attorney tells you, but my own experience with an attorney was awful. The best thing you can do for yourself is to research the BK laws for SC. All the lawyers are so busy and they don't seem to have time to really lay everything out for everyone who needs to file BK. If they did, people would not have so many questions during and after their BK proceedings. If you are looking at information in black and white writing....maybe even color ...then you will not wonder about anything. Just educate yourself and then you will really know what you stand to lose, if anything.

Good luck.

[Just Lue]

I agree with everyone. However, you must be aware of what can happen if discovered. Your petition will be denied and your discharge be forfeited. The trustee has one year to review the case before closing. At this point, I would just relax, but would not remove that money from your savings for quite some time. So if it becomes an issue, you still have it, and could pay into the court if later discovered. Leave the money alone until you receive your CLOSING notice, which can occur sooner than a year, but maybe not. Otherwise, you could be up for fraud, and that is not what you want. The best policy is to tell your attorney, and see what she has to say. Do not worry about it so much, but fretting about it, and not doing anything could result in fraud rather than just dismissal of your case. Is your settlement more than your discharged debts? What are we talking about in amounts.

[Just Lue]

Oh, one last thing I wanted to add. You may be fretting for nothing. Many states have exemptions for personal injury settlements to a certain amount. What state are you in? I am an attorney, but not a bankruptcy attorney. However, I am aware of the exemptions for personal injury settlements in many states.
Just call your lawyer, regardless if she said she didn't want to know about unknown transfers or real estate. I don't like that she said that, but I think you have little to worry about, but not being upfront with the court if you received these funds before filing and/or 341 you need to be totally honest. The trustees in many states are becoming bulldogs. And an ISO search can be done on any person to see if they received settlements. Many trustees before closing cases are doing ISO check to make sure no settlements that are not of personal injury nature are not being received 180 days after discharge which is usually the norm. Very few settlements received unless for business reasons are due other than personal injury anyways.

Hope that helps. I think you can keep your BR, and your funds without a fraud charge, but saying nothing could cost you more than its worth.

Just Lue

[tjrob]

Hi everyone, thanks for your responses. To answer your question Lue, the amount I recieved is $250,000. My debts including a car loan which I reaffirmed are about 74,000. The money is not so much from a settlement but rather a lump sum insurance payment for my injury. Here's the story, about 2 years ago my employer(I work in a hospital) started offering HIV indemnity insurance which provides a lump sum payment if you become Hiv positive while working. On 2/12, I needed to draw blood on a patient but the hand cart we use to keep blood draw supplies had trash in it. I decided to remove the trash but did not know there was a used butterfly needle under the trash and was stuck as I grabbed it. I went through the treatment and monitoring as directed by CDC guidlines but on 4/20 my blood came back officially positive. I just signed with a Workers comp attorney so I can be sure of my rights. So to clarify, I think this insurance is seperate from W/C because was we pay a few dollars a week through payroll deduction for the ins. The reason I did not file a claim right away is because I totally forgot about it because we recieve no notices for premium payments nor do we even recieve a policy since it is a hospital group policy (out of sight, out of mind). When I recieve my check every week, it lists all my deductions which are many but I never look at them. The fact I found out I was HIV positive made me crazy enough and I am still not clear headed is why I also did not think about it. I only remembered when a new employee mentioned which benefits she signed up for so I went to H.R, the next day for a claim form. This occured after I filed ch7. I am going crazy worring about this and also my HIV. I don't know what to do!!! I want to pay if I'm supposed to but I don't want to be charged with fraud if I tell someone. I can't tell my laywer because of what she said after I filed because she would probobly tell the court and then I'm screwed. I read the posts about how nothing would happen which made me feel a little better but the anxiety is still there. My question is, what is an ISO check and would a payment from a private insurance show up versus a settlement through the court??? Thanks for everybody's help. If you have anymore input for me, please respond!!! Thanks.

[Just Lue]

You have a lot on your plate right now. This is what I recommend. (I am stressing out about removal of $750 from my IRA a month before filing). Either tell me what your state you are in, or go back and look up to see if your state allows personal injury settlements as exempt. Your payment would qualify as such I would believe. If it does, chill, and let the discharge come. However, until your case is closed I want you to make sure that the $70,000 or so you discharged is not spent until your case is closed. That way if for some reason it was discovered, they could not get you for fraud (hard to prove intentional), and you would have that amount still available if the court rules that is not exempt. Closure can come earlier than a year so just watch PACER for that date for your case. I think you are fine, but keeping the funds not spent for the amount of the debts discharged should put you in the peace of mind and still allow use of $120000 or so in the meantime for 6 months to a year. Did you receive this amount AFTER your 341 or before? Thats important too. If you go to a second opinion attorney who did not represent you during the BR they could give you opinion without putting your present attorney in a position to be forced to report to the court.

[tjrob]

Hi Lue, Thanks for response! I live in Rhode Island and I recieved the money this past Monday(7/11). My 341 mtg was on 6/12. You said it matters if I recieved the money before or after my 341-can you explain why. And yes, I'll have the 70,000 available because I plan on keeping 98% of it in the bank for a long time. Also, what is PACER and an ISO check? Thanks.

[Just Lue]

PACER is a site where you can monitor your case, and determine if their are any objections file, and when you case gets closed, etc. Do a search on this site and it will explain more how to use it. ISO is a search mechanism that is used by insurance professionals to search a particular claimant's name, address, and social security to determine if any insurance claims were paid out previously. It is not used by attorneys very often, but occasionally trustee will do a search before closing, and it is possible you settlement will show up. It is good that you received it after the 341, because receipt beforehand would put in in a position where you had received it, and should have revealed. I still want to be very straight forward, that unless an exemption for personal injury exists, you may lose 70000 of it if you are under BR. Do a search under Rhode Island on the internet and find the exemptions. See if personal injury suits are exempt, if they are, you are fine. Still want you to talk to a second opinion attorney. It will give you the peace of mind to know what to do.

[tjrob]

can i stop my ch 7 bankruptcy at any time?

[HHM]

can i stop my ch 7 bankruptcy at any time?

Unfortunately, no you can't. You have to file a motion with the court to dismiss your chapter 7 and generally have to give a reason. Also, if the trustee has identified non-exempt assets, he may still be able to get some of their value. Then again, the trustee may not object to dismissal, but they usually have you sign a stipulation stating you will not refile BK for at least 6 months.

[Whittio]

WOW, $250k is a lot of money, BUT, not when you think about what you have to go through for the rest of your life to get that money. There isn't any amount of money in the world anyone could give me to make HIV a good thing. I am sorry that happened to you.

Everything I was going to say has already been said. (personal injury exemption and don't stop your BK process, because the BK is already on your record). I find it very odd that they just pay out THAT much money so quickly. I too would have assumed it would have taken longer.

I also assume your insurance co. won't cover all your medical expenses for HIV, so that $250k is going to be necessary in the future. Maybe that will spare you having to give it up? You can justify having future medical bills that the money will go toward?