Hi - my name is XXXXX XXXXX X'X a Bankruptcy attorney here to assist you.
Would the lump sum be severance pay, or a distribution from a retirement plan?
Also, is your Chapter 13 paying 100% of the amount owed to unsecured creditors?
I'm a moderator posting on behalf of the customer:
It would be neither, the lump sum would be an incentive bonus to retire separate from any 401k monies.
About the chapter 13 unsecured creditors are just getting 5%.
Thank you for your response.
The lump sum would then be treated as wages, for which there is an exemption of 75% if you used the Ohio state exemptions. Ohio Stat. 2329.66(A)(13)(b). This means you would be able to keep 75% of the bonus, and the 25% balance would have to be given to the Bankruptcy trustee.
If you used the federal exemptions, the exemption amount would be different, and would depend on whether or not you used the homestead exemption.
Instead of being bound by the above, it would be a good idea to first negotiate with the trustee, who is likely to accept less than 25% if he or she believes you will accept the bonus incentive to retire only if you can pay less to the Bankruptcy court.
I think this is what you wanted to know. If not, please let me know.
Yes, I believe so. Thanks!
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