Class action lawsuit while in a ch13.

[spidge]

I will be receiving a little over 1K from a class action lawsuit, but would like to know if I have a realistic chance of keeping it. I am almost two years into my ch13 and this money sure would come in handy. Every little bit helps you know. I combed through my ch13 plan court papers and could not find any reference to turning over such a payment. Taxes and income related papers were only requested. Is turning this over to the trustee required under general ch13 guidelines and therefor not required to be requested in the court plan papers?

PS. I did a search and only found old threads on this subject, so I decided to start a new one.

[spidge]

Well since it is not much money and there is no provision in my court papers I plan to keep it. The suit was brought on just recently and settled out of court, so I was not privy to it upon filing.

[justbroke]

You could "plan" to keep it, but unless it has some sort of exemption under your State's exemption scheme or the USC (11 USC 522), it could be difficult to "keep" it. It is technically disposable income.

That being said, you could be able to keep it because some Trustees don't care what happens during the pendency of your case so long as you are paying on time and are not in default. If you have an attorney, then it's easy to just ask the attorney should it be disclosed. Otherwise, you will need to look at California (and 9th Circuit) caselaw on the topic. Maybe Desprifreya can answer since he's in the 9th Circuit.

For fun, I looked up one of the Chapter 13 Standing Trustee's in California. As expected, there are "rules" of engagement for cases under Chapter 13 and the Trustee had this to say about "extra" money...

Contact the attorney promptly if the Debtor loses his or her job, encounters other new or unexpected financial problems, or if the Debtor’s income increases or the Debtor receives, or learns of the right to receive, money or other proceeds of an inheritance or legal action.

[spidge]

Thanks Justbroke, I will call my attorney once the check arrives before acting on it.