Q: I am considering filing bankruptcy but have a possible settlement coming in a court case that has been filed in fedl ct
PLZ presume I know I can see an atty, I know applic homestead/wild-card, etc., exemptions, and I know this is an asset...question is specific and answers will help me choose atty. Context: Ch 7, All debt is credit card, unsecured. Settlement/judgment will be more than enuf to pay off creditors. Likelihood of prevailing, good to strong - 70% per my atty but may take a fight. Settle as early as 5 months but more probably in a year or more, especially if go to trial. Is there a true cut-off time/date after which the case could settle and the $ not be subject to bk - what if it settles 2 wks after that date, for instance? i am deciding whether I should file ASAP or take the time to negotiate w/creditors for significantly lower amts in case the case settles during the pendency of bk. THX.
A: The very best thing you can do is to have a full discussion with a bankruptcy attorney about this. You will find that the suit you have is an asset of your bankruptcy estate if you file for bankruptcy.
Whether or not your settlement is considered an asset in a bankruptcy case does not depend on the date of the settlement. The claim itself is an asset in the bankruptcy case if it exists as of the date of filing, so if a person files bankruptcy with a pre-existing claim, it does not matter how long it takes to settle the case or to receive compensation. The bankruptcy case may be held open pending resolution of that asset.
*Kevin Chern is Managing Partner of UpRight Law, a national law firm with licensed attorneys providing bankruptcy and consumer legal services in all 50 states. He is an Illinois licensed attorney with 21 years of federal consumer bankruptcy and consumer protection law experience. This response is for informational purposes only and is not intended to be legal advice. For legal advice, consult an attorney licensed in your state with the appropriate expertise.
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