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Roger, Attorney
Category: Bankruptcy Law
Satisfied Customers: 30899
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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I had a bankruptcy ch 7 case in Alabama that was discharged

Customer Question

I had a bankruptcy ch 7 case in Alabama that was discharged September 2010. I informed Trustee of a potential law suit from Chinese Drywall. He asked questions and called the law firm handling my case, but nothing else. He didn't ask my atty. to put him on my claim as the trustee for my bk estate and he didn't take the case over. The law suit is clearly listed on my schedule B personal property for $500.00. The trustee did change the case from no asset to asset when I informed him of potential law suit at meeting of creditors. I never received any official notice from him, the court nor has my atty. My atty. for the BK case has moved and is no longer here. My Law Suit atty. says we are good to go, but she is not a BK atty. Can I assume he abandoned the claim? The builder wants to settle (Fix the house) and a few thousand to me for moving expenses etc.

Can I do this?
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  Roger replied 5 years ago.

Hi - my name is XXXXX XXXXX I'm a Bankruptcy litigation attorney here to assist you.


No, you should not assume that the trustee has abandoned this claim. Instead, the trustee is likely waiting to see if you get any money out of it, because until then, there is no asset.


Thus, if you settle the claim, you will have to report the settlement to the trustee because this is income from a claim you had before filing bankruptcy, so it is subject to bankruptcy trustee's governance.

Roger and 2 other Bankruptcy Law Specialists are ready to help you
Customer: replied 5 years ago.
Alabama has wild card exemption of 3000. Can I use my remainder against claim?

I have read that the trustee needed to take over my claim if he wanted it. he didn't?

They are offering moving expenses, is the trustee going to take that as well.
Expert:  Roger replied 5 years ago.

Usually, the court orders you to proceed with your case in civil court and report the findings back to the court and trustee when the case is over - that's how it has been done in any bankruptcy I've been involved in.


But, the bottom line is that if you don't have an abandonment of claim from the trustee, you should not assume he has abandoned it.


Yes, you should be able to use your wildcard exemption to protect all or part of the settlement. As for the movin expenses, you may be able to categorize this as an expense, not income, and keep it from the trustee.


I would recommend that you have your attorney speak with the trustee to see what agreement you can reach.