Exemptions In Bankruptcy

25 Jan What if I File Bankruptcy AFTER I Leave My Spouse and Home?

If you are planning on filing for bankruptcy soon after moving out of your marital residence, there are some potentially serious issuesto consider. Whilefiling for bankruptcy soon after separating from your spouse and leaving your home is entirely permissible,you should be sure you are fully...

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20 Dec Will They Take My Annuity if I File for Bankruptcy?

A 32-year-old single mother of two filed for chapter 7 bankruptcy in Kansas and lost her $900 monthly lifetime annuity payment. This week she lost her attempt to protect the annuity from her creditors and the bankruptcy trustee. The chapter 7 bankruptcy trustee likely will sell the future stream of annuity payments for a lump sum of money to pay $68,000 in creditors and his commission and attorneys fees for fighting the issue. Elisha Ortiz received the annuity to settle a wrongful death lawsuit after her mother was killed in a car accident when she was five years old. She received lump sum payments at ages 18, 19, 20, 21 and 25 and was to receive $900 monthly for life. She filed bankruptcy in Kansas City, Kansas in April 2009. She declared the annuity exempt under Kansas law. The trustee objected to the exemption. Ortiz lost her exemption claim because Kansas has no exemption for personal injury settlements. She would have won her exemption in at least 13 states, which allow the exemption under 11 U.S.C. 522(d)(11)(B).

Property that is exempt is removed from the bankruptcy estate and is not available to pay the claims of creditors. The debtor selects the property to be exempted from the statutory lists of exemptions available under the law of his state. The debtor gets to keep exempt property for use in making a fresh start after bankruptcy.

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