Before or After

[IvoryAngel]

I was skimming post on the forum and it got me to thinking .. We are finalizing a lawsuit for a car wreck in the next couple of weeks. Since I've been contemplating filing I asked my current attorney details and his thoughts because he's a up and up guy. I asked him what we could do with the money so that it would not be touched when we file I mean I think we'll get all of about 10,000 after fee's and doctor bills we will have to purchase furniture and would like to pay our rent for a few months and life insurance bills. So we will be left with roughly about 5000 or give or take.

We want a new car and he said that we could use that money to buy a new one because it could not be touched in the bk but wouldn't we get a better interest rate to wait till after we file? If we purchased before we file wouldn't we be stuck with a huge interest rate?

I don't know why we couldn't put that money in savings or something and it not be able to be taken? no ...

[btbeme]

I don't know why we couldn't put that money in savings or something and it not be able to be taken? no ...

Because that is the way that bankruptcy works.

The law is simple - if you have assets that are not protected by an exemption in the district in which you file, the Trustee will have the opportunity to seize and distribute those assets to the creditors. That is their job. If you have money that isn't protected, why wouldn't it be right to distribute that to your creditors?

There are two general ways to protect assets - one is to use an allowable exemption; the other is to determine the value of your equity in that asset to be so low as to not be of value to the Trustee. In OK, you have a $7500 vehicle exemption, which is very generous compared to most states. If you purchase a vehicle using the settlement money and have $7500 or less in equity, that would protect the vehicle.

Trust your attorney. Filing BK places your entire life - what you earn, what you own - into the Trustee's hands to do with what they see fit to do within the confines of the law. Try to get "cute" with one and you will not like the results.

[AngelinaCat]

Is your attorney one that specializes in BK, or is he a 'General Practice' or 'Family Law' type attorney? If he is not a BK attorney, you will need to talk with one or several, who do specialize in that field.

For one thing, if you are entering into the lawsuit before you file, you need to get everything over and settled BEFORE you file. Lawsuits can take months and or years to work their way through to the end. Then, once you get the settlement, if you do, let at least a year or two elapse before you file.

Or wait until you have filed and been discharged and closed, before you file suit. However, here is where you will run into the SOL.

A lawsuit in progress when you file, will be 'tolled' or 'stopped in place' during your BK. Neither side will be able to move, until after you are discharged. That freezes the SOL. But also will allow the trustee to ask at your 341 if anyone owes you any money, or do you have a lawsuit against anyone.

Good wishes to you.

[ValleYum]

I just looked over Oklahoma personal property exemptions and saw this:

Personal injury & wrongful death recoveries to $50,000
31 Okla. Stat. Ann. § 1 (A)(21)

From: http://www.legalconsumer.com/bankrup...-law.php?ST=OK

If the money is from a car accident, I believe that is considered 'personal injury'. So if you settle the suit/get the proceeds of the suit in the next few weeks before you file, it looks like that exemption should cover the amount of money you are getting.

IvoryAngel, make sure to ask the attorneys during your free BK consults about that state statute. The lawyer you spoke to already may have not been familiar with it if he isn't a BK attorney.

To make things simple on yourself, ask your attorney if you should keep the money from your lawsuit separate from ALL other money - like opening a bank account just for that money - so it would be absolutely 100% known to the Trustee where it originated from so the exemption of it will be very clear.

Good luck - hope that statute works like it sounds like it should!!

[AngelinaCat]

Thank you VY. This was a good catch!

[IvoryAngel]

Yes, the lawsuit is pretty much over we will get the check in the next two weeks or so this is where the money is coming to finally file. We will buy furniture, pay our life insurance for the rest of year and we hope to have at least 5000 left but if I could put it somewhere or savings I would prefer so that we would have a better chance or better interest rate at least. Just makes sense but I understand law rules etc.

He said buy furniture and a car with it and we would be good.

Going to read the noted find thanks!! Appreciate it!!!