If my husband has a settlement coming from a lawsuit filed during our Chapter 13, can the trustee take money from it if we filed Chapter 7 right after that?

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If my husband has a settlement coming from a lawsuit filed during our Chapter 13, can the trustee take money from it if we filed Chapter 7 right after that?

Asked on August 29, 2012 under Bankruptcy Law, Alabama

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

The trustee does not take money with respect to any bankruptcy filing. Rather, in a Chapter 13 (reorganization) one's debts are restructured to allow the debtor an opportunity to pay down the creditors in terms he or she can afford. With a Chapter 7, a debtor's debts would be discharged if the plan is approved by the court and creditors essentially receive nothing.

The possible settlement from your husband's lawsuit should have no effect on the bankruptcy that you have written about.


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