What to do about a lawsuit settlement anda bankruptcy filing?

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What to do about a lawsuit settlement anda bankruptcy filing?

I recently settled a back wage case for roughly $80,000 but have not signed or filed final papers. My wife and I are considering bankruptcy due to extensive bills, much of which is medical. I live in CA now but I am going to be relocating to TX soon and my wife and I want to file now. Should we wait until after we relocate to file? And what impact will this all have on the settlement money that I need to relocate and pay back both our parents money they have loaned us to survive through job loss and recession issues?

Asked on September 28, 2011 under Bankruptcy Law, California

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

I think that it would be best for you to seek counseling from an attorney in your area on the matter.  This question is not an easy one to answer and frankly there are concerns here about transfer or paying off creditors that may be considered to be fraudulent at first glance (paying family members first with in a certain time frame of filing is not permitted and the trustee can in fact ask for return of the funds) and no attorney can advise you to do that.  Also, you should look at which state laws may be more beneficial versus the federal bankruptcy laws.  There is nothing wrong with doing that and a little planning can go a long way.  Good luck to you. 


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