Just to be clear.......

[angelshubby6]

My wife and I are thinking about filing chapter 7. She recently recieved a personal injury settlement of $16,000. Although this is a lot of money.....it would hardly put a dent in our debts. If we went ahead and filed now, would this settlement de divided up to our creditors? Also, if we were to wait 6 months to file, would the settlement even be a factor?

Not trying to be dishonest here folks......just trying to decide whats best for my familys finacial situation. We live in Kentucky

[newbie2]

My wife and I are thinking about filing chapter 7. She recently recieved a personal injury settlement of $16,000. Although this is a lot of money.....it would hardly put a dent in our debts. If we went ahead and filed now, would this settlement de divided up to our creditors? Also, if we were to wait 6 months to file, would the settlement even be a factor?

Not trying to be dishonest here folks......just trying to decide whats best for my familys finacial situation. We live in Kentucky

Take a look at your states exemptions to see if this $16,000 can be exempted from being distributed to your unsecured creditors. I don't know about a safe time period, others perhaps may and will chime in.

[SeattleBK]

Per Nolo book, for Kentucky you can exempt under Personal property: Personal injury recoveries up to $7,500(not to include pain & suffering or pecuniary loss)

Also Kentucky has a wildcard of $1,000 for any property.

Also, just a note: Federal Bankruptcy exemptions can't be used in Kentucky.

Also, note: if I were you I'd check for updates of the information I have supplied above just to make sure the figures haven't been updated.

[DeadManCrawling]

I would spend the money that cannot be exempted on essentials.

Food, medical, dental, etc. Also, pay the bk attorney if you plan to use one.

Nothing wrong with any of this. Save receipts.

File once you can exempt the remaining cash.

[NewDawn]

Have you looked to see what Kentucky exempts as far as IRA or retirement accounts? You might be able to put some of your money in one of those accounts.

[backtoschool]

The above post by SeattleBK is incorrect. You can use federal exemptions in Kentucky.

The federal personal injury exemption is $18,450, so all of your personal injury claim will be exempt.

[SeattleBK]

[QUOTE=backtoschool;415857]The above post by SeattleBK is incorrect. You can use federal exemptions in Kentucky.

Are you sure?

The Nolo book that I have says: Federal Bankruptcy Exemptions not available.

This is in Appendix 1: State and Federal Exemption tables.

I don't have the latest edition so as I said before, check for updates.


Never, mind, you are right, it was updated and my edition doesn't include the update.


"427.170 Federal bankruptcy code exemptions applicable in Kentucky.
An individual debtor domiciled in this state is authorized to exempt from property of said debtor's estate the property specified under 11 U.S.C. sec. 522(d).
Effective: June 20, 2005
History: Amended 2005 Ky. Acts ch. 141, sec. 1, effective June"

In that case, you might be able to exempt it all. I exempted $4,700 in cash under federal exemptions and I remember that even more than that can be exempted.

[backtoschool]

I just checked, and Federal exemptions have been available since 2005 in Kentucky. They didn't used to be available before that, so that is probably why we both have different info.

This was upheld in a court decision in summer of 2009, where non-bankruptcy debtors were trying to use federal exemptions in kentucky too. The court ruled that only bankruptcy debtors can use federal exemptions.

[SeattleBK]

Thanks, Backtoschool, now I know not to use that book anymore to give out advice.

I have a newer Nolo version, which is the one I used for my own BK, but it's packed up somewhere, and I can't find it or I've been too lazy to really look for it. Next, time I'll do a google search to be sure before answering.

[angelshubby6]

Thanks for all of the advice. I spoke with one attorney that thought we would have to give part of the money to the trustee. Up to this point, this is the only attorney I have spoken to. But if what you guys are saying is true, this attorney might be incorrect and we could possibly keep the full amount.