First, I want to say that I have a call into my BK attorney and am waiting for a response. I just wanted to post this here while I wait to hear from him to see if anyone has any experience with something like this.
I received an unexpected letter yesterday from an attorney I hired around four years ago to investigate a potential personal injury claim on my behalf. I was advised that I will be receiving a settlement as a result of my claim in early 2009. I know with 100% certainty that in a normal non-bankruptcy situation the settlement proceeds would not subject to income or any other kind of tax in my state. However, because I am planning to file CH 7 in January, my situation is far from normal.
Here's the question: Are personal injury settlement proceeds considered income or are they just considered an asset? I know it will be considered one or the other but I am not sure which. If it's considered income I will be pushed way over the state median and I'd be hosed. If it is an asset, my state allows for use of the federal BK exemptions, which would give me an approximate $17,000 exemption for personal injury settlement proceeds. So, in other words, that would be the portion that goes in my pocket that I could keep. My creditors would get the rest and I'd go from a no-asset case, which I am currently, to being an asset case.
Anyone have any experience with this??
I received an unexpected letter yesterday from an attorney I hired around four years ago to investigate a potential personal injury claim on my behalf. I was advised that I will be receiving a settlement as a result of my claim in early 2009. I know with 100% certainty that in a normal non-bankruptcy situation the settlement proceeds would not subject to income or any other kind of tax in my state. However, because I am planning to file CH 7 in January, my situation is far from normal.
Here's the question: Are personal injury settlement proceeds considered income or are they just considered an asset? I know it will be considered one or the other but I am not sure which. If it's considered income I will be pushed way over the state median and I'd be hosed. If it is an asset, my state allows for use of the federal BK exemptions, which would give me an approximate $17,000 exemption for personal injury settlement proceeds. So, in other words, that would be the portion that goes in my pocket that I could keep. My creditors would get the rest and I'd go from a no-asset case, which I am currently, to being an asset case.
Anyone have any experience with this??
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