Surprise lump sum of cash just before filing

[Lana]

I dont know what to do. My deadbeat ex is about 30k behind in child support. I never expected to see a cent. I am broke with nothing in the bank as it should be and just waiting for my bk file date and all of a sudden I find a surprise 14k payment on my child support card. He must have made a huge back payment.

What am I gonna do now? I'm screwed. What should i do with this money?

[Tbornetun]

What state are you in? In most states, child support is an exempt asset. Does the 14K put you over the means test?

You are not screwed.

[aljohnson007]

Don't believe you have anything to worry about - it is exempt.

[backtoschool]

Child support is exempt, even if it is back-paid child support.

[Lana]

Thank God. That is so relieving. I've been freaking out and I can never get a hold of my attorney when it feels urgent...I'm not sure about the means. I was pretty close to means but I'm self employed so that changes every day. I'm sure I could do a lot of business expenditures quickly if it put me over.
I just dont want to have to liquidate that money to creditors. I've spent my whole life struggling to take care of my kid myself because his father never paid. Funny how now he pays.
I mean the surprise cash infusion is great, but right now so unexpectedly. Weird.

[aces67]

I think it's exempt also. Congrats on finally getting something out of him

[OnTheRocks]

Looks like Christmas is coming early for you

[Lana]

Attorney also says it should not be a problem, but not to go spending it anyway
...damn...
A sunny vacation and new furniture would have been nice! JUST KIDDING!!! I have learned my lesson. Money burning a hole in my pocket is what got me here.

Feels nice to have even a little money though. Havent had any for a long time.

Support enforcement finally comes through!

Thanks for the advice everyone.

[AngelinaCatHub]

The money is technically not yours but your son's. It is for his upkeep and welfare. Since you have fronted this expense that is your ex's responsibility, you are only reimbursed the money that you paid for your son. It is exempt and I would just hold on to it as your lawyer suggested. Let it cool in your mind but use it wisely. Right now it looks like a big amount but it can go fast and you don't even notice. 'Hub

[DeadManCrawling]

Make sure that money stays in an account where it can be directly traced to that exact payment. I would consider opening a separate account in this case, to avoid what is called "comingling" of funds. What this means is that, at some point, your usual earnings, which may not be exempt, mix with the lump sum child support. After a certain period, a trustee COULD attempt to claim it is nonexempt, since it mixed with your other income.

This is unlikely, but not impossible. For a number that large, it is probably worth separating it into an account. Have the bank title that account "Child Support (Child's Name) just for purposes of later proving the money is what you claim and is also, therefore exempt from BK.

[Lana]

Apparently it's not so easy. My lawyer is having an issue with it. Looks like it's going to kill my bk unless I want to give it all up to the bk.
The funds are separate. I have special debit card from the state where all my child support money gets deposited so it is separate from all other funds.
It's still an asset. Now this money totally blows my bk out of the water and I will have to work it out first.
Godammit.

[readytofile]

I would consult another attorney and get a second opinion. My lawyer told me if I got anything it would be exempt. Just check and be sure.

[readytofile]

Here, show this to your lawyer:

http://www.bankruptcyinformation.com/CT_exemp.htm

It clearly states that child support is exempt.

[Tbornetun]

Maybe the payment put the OP over on the means for income. It would make her annual income look like $28,000 more because the payment was received in the last 6 months. This could be what her attorney is worried about. I still feel that it could be overcome. Was it paid after the first of November? File before the end of November and it won't be included in the calculation.