Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
Hi and welcome to JA. Ray here to help you today.Please bear with me a few moments while I review your question and respond.
All personal injury claims are assets just like your car, furniture, and other items of personal property and must be disclosed in your schedules. Failing to disclose an injury sustained before filing may lead to the loss of any recovery to which you might be entitled. Even if the failure to disclose is unintentional, it may not save your claim. If Joan here discloses the recovery it should not be a problem.She may have to answer questions about it, but she can document the bills that Uncle Bob paid on her behalf it should not be a problem.Not disclosing it here would be the problem.If she does that it is her money , the repayment to Bob is proper since it is her money and was reported in the filing.
NY bankruptcy law would allow you to have the recovery if you just report it on your filing.
The article from the link you posted cites the P.I. exemption of $23,675 in Pennsylvania. In NYC I believe the P.I. exemption is the first $7,500. Is that right? The article also states that a Debtor can "stack" exemptions by using the balance of a homestead exemption to exempt the P.I. award. Never heard of that one! In NYC, which is the case here, the homestead exemption is $150K. Debtor has $73K in equity in her home. Does this mean that she can invoke the balance of her unused homestead exemption against the P.I. award of $32K?
New York state law2 saves bankruptcy filers from losing all of their valued property by providing a number of exemptions from liquidation. For example, you may keep a certain amount of equity in your home or car, certain personal property, insurance benefits, and more. One exemption addresses any personal injury recoveries that you may have received in a separate case.
The law allows you to keep up to $7,500 of a personal injury award that was meant to compensate financial losses. The exemption does not allow you to keep any personal injury recoveries that were meant to reimburse you for intangible losses, such as pain and suffering. If your injuries were relatively minor, chances are that your award was less than $7,500 and you will be able to hold on to that money.
And thats correct you can try and use the balance of the homestead exemption here to stack them and shelter more of the recovery.This may be your best option here based on your situation.
Here are a few things you need to know about personal injury settlements in a New York bankruptcy:
Federal exemptions might be better for her, she should ue bankruptcy lawyer to make sure which are better for her here to protect her assets.
Unfortunately, she has $75K in equity in her house, so she has to invoke the state exemption. But, your last comment, "you can try and use the homestead exemption to stack...." Is that applicable if she invokes state exemption?
Yes it is , I think this would allow her to shelter it under the state exemptions rather than federal here.
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