Can I keep my windfall?

[Callie]

Hey everyone,

My last day for objections was 1/21, and pacer says "awaiting discharge". In the meantime, I have come into a little windfall of $2000 and want to put it in the bank (gosh, do I need that money!!!!). That money would not put a dent in the debts I had.

Is it safe to deposit the check now without risking having it taken? Thanks a lot. I have been reading the forum for a long time, and the advice here has been so helpful.

[bkfiler]

who knows.

what is the windfall from?
what date did you get the windfall?
what date did you know you were getting the windfall?
how much is the windfall exaclty?
will the IRS know about the windfall?
will you need to pay taxes on the windfall?
are their records showing you got the windfall?
is the windfall connected to any accounts your owe a debt to?

[Callie]

Windfall

who knows.

what is the windfall from?
what date did you get the windfall?
what date did you know you were getting the windfall?
how much is the windfall exaclty?
will the IRS know about the windfall?
will you need to pay taxes on the windfall?
are their records showing you got the windfall?
is the windfall connected to any accounts your owe a debt to?

The money (a little over $2000) was a settlement from an accident. I got it a couple of weeks ago, and have been sitting on the check, because I didn't know what to do.

At the time of filing, it looked like the case was going to be thrown out, and there was no real end in site, therefore there was nothing to report to the trustee.

There will be no record of it, because the case was settled out of court. No taxes or anything..... it's my money free & clear, and is not connected to any of my debtors. My debts were over $40,000 anyway, so this little money wasn't going to satisfy any debtor.

Filed: LAST DAY UNDER OLD LAW
Trustee Hearing: 11/22/05
Last day to object: 1/21
Status: "Awaiting Discharge"

[bilbo]

If the accident occured prior to filing bankruptcy the trustee will probably want to know about the money. Ask your attorney

[StaciMM]

What state do you live in? There might be a way to exempt it as a wild card, and some states allow an automatic exemption for personal injury claims.

[Mysocalledlyf]

You know, I can speak from my experience..the same thing happend to me. I received a lot of money(from the govt.) right before my 341 meeting, like a week before. I didnt say anything, I was worried about it. I mean it wasnt a whole lot but close to your amount. I just didnt cash it or anything. And, I can laugh now b/c I asked everyone and they said 'tell your attorney, tell your attorney". But if I did I think it would have opened an unnecessary can of worms. So now Im discharged and I still have my money. I say keep the check and don't let your tongue get you in trouble. But that's from my experience. And hey, Im sure you pretty much need the money. I think they would leave us living in a dumpster if it was possible for them to take every little thing we have!
Good luck! But Im sure you'll be fine!

[Callie]

[bkfiler]

you were required to list the incident and the case on your bk petition. you know that. not to do so is fraud. if the trustee finds out that you knew about the case beforehand and didnt tell him then you will be contacted and your case might be reopened. remember that under the new laws cases are now reviewed by the FBI randomly.

also, 'support' might not be what you think it is. you might need the money but you probably dont need it to support yourself from the accident, etc and would still keep on living if you didnt get it.

you must have had plenty of exemptions left to claim your lawsuit earning? do you own a home? how much remaining of the wildcard exemptions did you have left over?

[Callie]

No I didn't know. Like I said, the case was iffy and it looked like I wasn't going to get anything. I own no property or anything, and it was never my intention to fraud anyone. I didn't have a lawyer because the ones I talked to wanted $500 per hour and $1500 up front.

Shoot, if I had that kind of money I wouldn't have needed to file Chapter 7. Now I'm going to be worried for the rest of my life.

[StaciMM]

The upside is that you can probably exempt it-I'm fairly certain CA has a wild card, especially if you don't own a home.

The downside is that since you didn't list it, if the trustee finds out-he'll dig deep wondering what else you didn't list. Keep in mind that even after you are discharged and closed, your case can be reopened for 1 year. If something happens and there is nothing to find-other than a little grief, you'll be fine.

[bkfiler]

what do you mean you didnt know? you were asked about it on the bk forms. the case was a case. iffy is when you havnt even decided to follow up on the event at all. it seems like did.

fraud in this case would be not listing it when you were asked to on your petition.

it was an active case and you should have listed it. you could have easily exempted any and all amounts way past that and kept it.

how much was your total wildcard exemption amount and how much of that did you use on your peition?

did you have an attorney?

if you wanted to correct it you could reopen your case, change your schedules to exempt the amount. i sort of doubt they would take it. it sprobably too small an amount to make it look like you are a big time fraudulent filer imo. but at least you know you have the option of doing that.

you can also do that at any time in the future as well imo, but not sure. i dont see why not.

did you have a bk attorney? what did he say?

im just trying to explain what they could do to you and what you should have done. you asked so i had to tell you. will anything happen? dont know.

by the way, why do you think you dont have to pay taxes on that?

[StaciMM]

I don't think injury settlement is always considered taxable. My worker's comp claim wasn't.

The OP said she couldn't afford an attorney, and the case hasn't discharged or closed yet. The safe thing to do would be to amend schedules B&C, and also the form (statement of financial affairs, I think) where it asks if you are involved in any lawsuits or expecting to receive anything from any lawsuits.

[JimH]

If the accident and settlement happen after filing, then you should have no problem.

If you had the accident before filing, then you are defrauding creditors because although you may not have had a settlement at that time, it is reasonable to expect one from an accident - at least that is the way the trustee and court will view it. It should of been disclosed. If you have an exemption that would cover that anyways, then you are probably ok although it still should of been disclosed.

If you decide to keep it in spite of the possible consequences, then cash it out at the bank that issued the check or a check cashing place. That would be less traceable than cashing it at your bank.

[bkfiler]

I don't think injury settlement is always considered taxable. My worker's comp claim wasn't.

The OP said she couldn't afford an attorney, and the case hasn't discharged or closed yet. The safe thing to do would be to amend schedules B&C, and also the form (statement of financial affairs, I think) where it asks if you are involved in any lawsuits or expecting to receive anything from any lawsuits.

staci, bk attorneys dont charge by the hour for most people. she was talking about an attorney for the accident or whatever it was.

when was the bk filed?
when was the 341?
when was the discharge?
when was teh case closed?
when was the accicent?
when did you first seek an attorney about the accident?
when was the check given to you?
when did you first speak to their side of the ballgame regarding a settlement?

[Callie]

I was talking about the bk attorneys, and they do charge by the hour. The fees I was quoted were way out of my budget.

bk filed: 10-14-05
341: 11-22-05
no discharge yet: "Awaiting Discharge"
accident was in 2003, got atty at that time
i don't know when the talks started, I know it was settled out of court
got the check a couple of weeks ago.

Hey, I never meant to break the law, and am terrified at this point of opening a nasty can of worms.

How could the trustee find out about this, if he were to dig?