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Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2820
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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I am permanently disabled. I have 15,000 in a separate account

Customer Question

I am permanently disabled. I have 15,000 in a separate account left from a compensatory award. As I am getting divorced, I may, down the road, need to file bankruptcy. Should I close this account prior to any filing or is it safe from creditors where it is
Submitted: 7 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 7 years ago.
HiCustomer
Great question.
Each state has exemptions to protect certain assets when a person files bankruptcy. Even if closed, you would need to disclose the cash or wherever you may transfer the money to.

In Maryland, here is the exemption statute.

§ 11-504. Exemptions from execution
(b) The following items are exempt from execution on a judgment

(2) Money payable in the event of sickness, accident, injury, or death of any person, including compensation for loss of
future earnings. This exemption includes but is not limited to money payable on account of judgments, arbitrations,
compromises, insurance, benefits, compensation, and relief. Disability income benefits are not exempt if the judgment is
for necessities contracted for after the disability is incurred

Therefore, you should meet with a local bankruptcy attorney to make sure that the money in the account falls within this exemption. If it does, then the money is protected from bankruptcy liquidation.
Customer: replied 7 years ago.
answer this--if i closed it now and did not file for several months, would I still need to disclose it
Expert:  Terry L. replied 7 years ago.
yes, you have to disclose closed accounts for 2 years before filing.
Terry L. and 2 other Bankruptcy Law Specialists are ready to help you
Expert:  Terry L. replied 7 years ago.
my error, it is 12 months for disclosure.

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