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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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BANKRUPTCY - After bankruptcy was finalized by trustee, I learned

Resolved Question:

BANKRUPTCY - After bankruptcy was finalized by trustee, I learned of possible fraud against me by my previous employer, that occurred BEFORE the filing. If I seek legal counsel, and win, would proceeds of successful suit go to me or bankruptcy court (old creditors)? The information was given to me by the Los Angeles D.A., again, long after I filed bk.

Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 6 years ago.

Hi JACustomer,

Because the fraud occurred (the cause of action accrued) before the Bankruptcy was filed, any compensation you receive from that lawsuit will be subject to the Bankruptcy court. This means you would be able to keep any portion for which you have an exemption, and the rest would go to pay creditors.


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

Customer: replied 6 years ago.
What is an exception? Thanks,
Expert:  cfortunato replied 6 years ago.

Do you mean "an exception to discharge", or did you mean an "exemption"?

Customer: replied 6 years ago.
An exemption, per your first answer. What is it? Could I contact the trustee and ask for an abandonment of the "asset.?"
Expert:  cfortunato replied 6 years ago.

The exemptions are the assets that you are allowed to keep when you file a Bankruptcy. In California a debtor has a choice of 2 different sets of exemptions.

Whether and how much of an award you would be able to keep will depend on how much the award is, which set of exemptions you used, and how much - if any - available exemptions (assets) were left over that you can use for the award.

A trustee will only abandon assets that have no value, or a value less than an available exemption.

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