How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask cfortunato Your Own Question
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
Type Your Bankruptcy Law Question Here...
cfortunato is online now
A new question is answered every 9 seconds

Receiving a settlement from a law suit that I have an open

This answer was rated:

Receiving a settlement from a law suit that I have an open backrupcy on. Do I have to pay taxes on this if I receive none of the settlement and it goes to the creditors? Also at what amounts can the bankruptcy trustee hold for the creditors.

Hi JACustomer,

What was the lawsuit for? What were the damages for?

Customer: replied 6 years ago.

I was listed as a class member in a lawsuit against Residential Funding Corporation. Illegal, excessive interest and illegal organization. I don't know what the amount of the settlement is yet, but belive the trustee has the settlement.

That is the type of settlement that is not taxable. However, the trustee can keep the entire settlement - up to an amount that would completely pay off the creditors, plus the trustee's 10% fee.

If there is anything left after paying the creditors in full (plus trustee's fee), you will receive the balance.

cfortunato and other Bankruptcy Law Specialists are ready to help you
Customer: replied 6 years ago.
Very good, thank you. That's what I was hoping for. Have a great day.
You're welcome! And thank you for accepting my answer!

Related Bankruptcy Law Questions