Bankruptcy Law Questions? Ask a Bankruptcy Lawyer.
Question: I am probably going into foreclosure on my home, and have $25,000 in charge offs. My issue is that I will be receiving a check from my county (Suffolk), NY, treasurer's office in the amount of approximately $60,000, from a personal injury lawsuit, within 2-3 weeks. What do I do with this check? Response: You need to deposit the check in your bank account as you would with any other check. You may want to open a new account and name the account personal injury recovery/payments. However, your bankruptcy filing should be postponed until you can spend down the money. Your personal injury payments are only exempt up to $21, 625.00, if you choose Federal Exemptions Scheme when you file for bankruptcy protection. See 11 U.S.C. Sections 522(d)(11)(D). If you are not claiming any homestead on your house, you can claim additional exemption of $11,975.00 using the Wild Card Exemption and Homestead Exemption Pour Over. See 11 U.S.C. Section 522(d)(5). If you decide to use New York Exemptions, you can only exempt up to $7,500.00 of your personal injury payments. See New York Debtor & Creditor Law Section 282 (3)(iii). When you file for bankruptcy protection, you have to decide whether to use the Federal Exemptions Scheme or New York Exemptions Scheme. You cannot choose both. Before, you can only choose New York Exemptions Scheme because New York opted out of the Federal Exemptions Scheme. However, eight months ago New York opted in.