Understanding the Basics of Consumer, Financial and Personal Injury Law

About Me

Understanding the Basics of Consumer, Financial and Personal Injury Law

Up until nine months ago, I always considered myself above everyone else when it came to having good credit. I paid my bills on time and never went a day late on rent. I became the epitome of what a good consumer should be. But after losing my job after 12 years of faithfulness and hard work, my ego took a hit and so did my credit and finances. Humbled, broke and unable to pay my bills, I decided to file bankruptcy. I couldn't get a job right away and the only way to stay afloat was to start over. My bankruptcy attorney helped me do that. I started this blog to teach you how to come back from a financial and personal disaster with your life intact. I hope that you find the legal counsel you need to rebuild your life as well.

Keeping Your Settlement: Your Rights with a Chapter 7 Bankruptcy

Are you receiving a settlement but are planning to file Chapter 7 bankruptcy? As you may already know, this type of bankruptcy will require you to turn over many of your assets and property in order to settle your debt, including any settlements you receive. However, there are some instances in which you may be able to keep some of the settlement money. The following are some exemptions to having your settlement included in your bankruptcy proceedings:

Utilize a Personal Injury Exemption

Some states will allow you to keep some or all of a settlement if you received it in a personal injury lawsuit. If you are permanently disabled due to the injury, for example, the bankruptcy court may allow you to keep a portion of the settlement to support yourself. You may be required to provide proof of your living expenses so that they will know how much of the settlement you are allowed to keep. Depending on the size of your settlement, you may be able to keep all of it as an income source.

Specific Federal Exemptions

Some states have no bankruptcy exemptions. In this case, you can take advantage of federal exemptions. This will allow you to keep a percentage of your settlement determined by the court. This amount comes from money that you received in order to pay your medical bills resulting from the injury. This will not apply to any settlement money awarded for punitive damages or an award you received that is designed to be a replacement for your lost income. Most federal exemptions will allow you to keep that money.

Check for Wildcard Exemptions

In some cases, smaller settlements may be subject to wildcard exemptions if they are available in your state. This exemption will allow you to keep your settlement money up to a certain dollar amount. The amount you will be allowed to keep will be dependent on your state. If the amount you received falls below your state's minimum threshold, you may be able to keep the settlement money.

Filing Chapter 7 bankruptcy is a major legal undertaking, so using a reputable attorney is crucial. You are entitled to certain rights under this type of proceeding, including what property you are allowed to retain. Your attorney will also know about all exemptions that you are entitled to in your state so that you retain as much of your money and property as possible.


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