Legal Question in Bankruptcy in California

Auto Insurance Settlement and Chapter 7
We have had to file bankruptcy due to a car accident my husband had in January. He has not worked since, and is losing his job because of it. We have had mounting medical bills, and only one income.

We have had to settle for the $15,000.00 limits on the other persons policy. We know that a portion of that has to go to the HMO, and we will need the rest to replace his vehicle and pay medical bills.

We will be filing for Chapter 7 before we get the money.

How will this settlement be affected, if at all?

Asked on 11/26/02, 1:39 pm

2 Answers from Attorneys

Robert Miller Robert L. Miller & Associates, A Law Corporation

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Re: Auto Insurance Settlement and Chapter 7

Thank you for your inquiry. Bankruptcy law allows you to apply exemptions to keep property as allowed under the code, but the exemptions limit what is "protected" within the bankruptcy.

If you file before you get the money, the trustee has the right to delay the bankruptcy to assert a right on behalf of creditors to the amount, if it is going to come in within 180 days after filing.

I can't urge enough that you meet with an attorney to plan our your exemptions, so that you are not surprised after filing. Most attorneys, such as my firm, offer a free consultation, and you will want to be as educated as possible before you file.

Best of luck, and please feel free to email me directly at [email protected], if you have any questions.

Answered on 11/26/02, 3:14 pm

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