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  1. #1
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    Default Is a Personal Injury Settlement an Asset in Bankruptcy

    My question involves bankruptcy in the state of: New Jersey

    I am thinking about filing bankruptcy but wanted to know if a personal injury settlement givien to me a little over a year ago will be part of the bankruptcy? I do not still have the money but was wondering if I will be required to make it up.

  2. #2
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    Default Re: Is a Personal Injury Settlement an Asset in Bankruptcy

    Quote Quoting DarrinB
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    My question involves bankruptcy in the state of: New Jersey

    I am thinking about filing bankruptcy but wanted to know if a personal injury settlement givien to me a little over a year ago will be part of the bankruptcy? I do not still have the money but was wondering if I will be required to make it up.
    It would be an asset of the bankrupt estate and subject to the claims of your creditors unless you can apply an exemption to cover it.

  3. #3
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    Default Re: Is a Personal Injury Settlement an Asset in Bankruptcy

    Quote Quoting Taxing Matters
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    It would be an asset of the bankrupt estate and subject to the claims of your creditors unless you can apply an exemption to cover it.
    Even if my payment was over 1 year ago? is there a time limit as to when you receive a personal injury claim and when you file bankruptcy?

  4. #4
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    Default Re: Is a Personal Injury Settlement an Asset in Bankruptcy

    Quote Quoting DarrinB
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    Even if my payment was over 1 year ago? is there a time limit as to when you receive a personal injury claim and when you file bankruptcy?
    Let’s get some details here to sort this out. Are you the person who has to pay out money in the personal injury settlement or the one who is to be paid in the settlement?

    If you are the one that has to pay, what kind of personal injury was involved — a DUI accident, some other auto accident, something else? And have you paid any of it? If so, how long before the bankruptcy petition filing did you pay it?

    If you are the one who is getting paid in the settlement, are you still owed some or all of what you are due under the settlement? If you have received some or all of it, do you still have it? If the answer is no, what did you do with the money?

    As a general matter, if you are the one getting paid in the settlement then whatever you are owed that is not yet paid on the date you file the bankruptcy petition is an asset of the bankrupt estate and the trustee will use that to pay creditors unless you can exempt it. For money you already received, if you still have the cash that is of course an asset of the bankrupt estate, too. If you spent or gave the money away, then the details of when and how you spent/transferred the money will matter as to whether the trustee can recover it as a preference payment.

    If you are the one who owes the money in the settlement then in most cases that obligation would be eligible for discharge in your bankruptcy, with the notable exception of DUI accidents — debts you owe from causing an accident while driving DUI are not dischargeable.

  5. #5
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    Default Re: Is a Personal Injury Settlement an Asset in Bankruptcy

    I was the one that was paid the settlement. The settlement was fully paid a little over a year ago. Some of the money was to pay bills since I was out of work for 1 year. Some was to used for personal things. I do not have any of the money left.

  6. #6
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    Default Re: Is a Personal Injury Settlement an Asset in Bankruptcy

    If you don’t have any money left then refer to taxing matters statement;

    If you spent or gave the money away, then the details of when and how you spent/transferred the money will matter as to whether the trustee can recover it as a preference payment.

  7. #7
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    Default Re: Is a Personal Injury Settlement an Asset in Bankruptcy

    Quote Quoting DarrinB
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    I was the one that was paid the settlement. The settlement was fully paid a little over a year ago. Some of the money was to pay bills since I was out of work for 1 year. Some was to used for personal things. I do not have any of the money left.
    Ok, then you asked at the beginning of this threat whether you would be required to replace the money that was spent. The answer to that is no. If you paid bills within the 90 days before the filing of the petition those can be considered preference payments but in those situations the trustee goes after the business that got your money to return it to the bankrupt estate; the trustee does not come after you for it. In short this is not going to be something that will require you to cough up cash (which you likely do not have anyway).

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