Do I have to report an insurancesettlement to the bankruptcy court?
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Do I have to report an insurancesettlement to the bankruptcy court?
I am 3 years into a Chapter 13. I was just in an accident and may receive a settlement from the insurance company for medical expenses. Do I have to report this money to the Trustee? Do they have a right to the money?
Asked on March 28, 2011 under Bankruptcy Law, Colorado
Answers:
MD, Member, California Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
You should report all assets (especially those that are newly acquired) to your trustee because to do otherwise could create a problem. You could run the risk of having the court deny the rest of your bankruptcy claim and throw it out. You could be required to pay all your debts (now accelerated due to possible breach of debt owed) immediately. Consider reviewing your trustee's documents sent to you, along with any bankruptcy court orders that require you to report. See if there are exclusion provisions regarding reporting and whether you have to report monies you get in settlement meant to pay off medical expenses, wherein nothing remains for you to keep out of pocket.
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