Burlington County Bankruptcy and Lawsuit Awards
Can I Keep My Personal Injury Settlement Award After Bankruptcy?
If you have recently received – or will be receiving – a personal injury settlement, it is important to realize this award is considered an asset in your bankruptcy proceedings. When you file for bankruptcy, you need to mention your personal injury judgment in your petition, even if the settlement itself has not yet been determined. If you are planning on filing a personal injury lawsuit, you should alert your McDowell Posternock Apell & Detrick, PC bankruptcy attorney so they can advise you accordingly when handling your case.
What Will Happen to My Settlement?
Under NJ bankruptcy exemption rules, there is no provision allowing you to keep awards from personal injury lawsuits. Luckily, federal exemptions have two provisions that will protect your personal injury awards.
- Federal bankruptcy exemptions specify that debtors are permitted an $21,625 exemption for personal bodily injury, not including pain and suffering.
- If your personal injury award is more than $21,625, you can utilize any or all of your so-called wildcard exemption, which totals $1,550 plus $10,825 if you have not used the exemption for your personal residence.
In the event that your personal injury award surpasses the federal exemption limit, you must surrender the remainder of this settlement to your court-appointed trustee. The trustee will then allocate the award to your creditors to assist in paying off your debts.
Seek bankruptcy advice with a free phone consultation
Do you have questions about how your personal injury settlement will be impacted when you declare bankruptcy? The South Jersey bankruptcy attorneys at McDowell Posternock Apell & Detrick, PC know that exemptions are complicated. We will gladly explain exemptions to you in the simplest terms and help you determine which of your assets will be exempt from bankruptcy. Call us today or fill out our contact form to schedule a free phone consultation to learn more about bankruptcy exemptions.