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Category: Bankruptcy Law
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Experience:  Bankruptcy professor.
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I sold my business and have two future payments totaling $13K

Resolved Question:

I sold my business and have two future payments totaling $13K coming in July and December 2012. I am declaring Chapter 7 BK in California and need to know the code or number of the Protection Law for such future retirement funds.
Submitted: 2 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 2 years ago.

Hi JACustomer,

What type of retirement account are you asking about (eg. IRA, 401K, etc.)?

Customer: replied 2 years ago.
It is not an account. I sold my business last year and have two payments coming this year to finalize the sale. I have no other retirement savings due to using them in a futile attempt to save our house. I am 68.
Expert:  cfortunato replied 2 years ago.

You can only exempt money in an IRA-qualified retirement account. You cannot exempt the money you will be getting to sell your business because you have no other funds available for retirement. However, you may be able to exempt them in another manner - if you do not need to use the entire homestead exemption to protect your home, you can use part of that exemption to protect the money you receive from the sale of your business.

To help determine this, please answer the following:

1) What is the value of your home?

2) What is the balance on the mortgage for your home?

3) Will you be receiving $13,000 total (2 payments of $6,500)?

Customer: replied 2 years ago.
Home has already been foreclosed upon

Payments will be $6500 each in July and December this year.
Expert:  cfortunato replied 2 years ago.

Then you can exempt those payments using California Stat. 703.140(b)(5). With that particular exemption code, you can exempt up to $23,250 worth of any property - including the money you will receive for selling your business.

 

I think this is what you wanted to know. If not, please let me know.
Thank you.

 

 

Customer: replied 2 years ago.
One more quicky. Does that Statute satisfy Chapter 7 Bankruptcy Law Worksheet as a "Protection Law"?
Thank you sooooo much.
Expert:  cfortunato replied 2 years ago.
Yes - exemptions are also known as "protections". So that exemption law is also the protection law.
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience: Bankruptcy professor.
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