Do I just have to pay part of my settlement, or is there something that says I can keep it?

If your repayment plan is less than a 100% plan, the trustee is entitled to all of your "disposable income" throughout the term of the bankruptcy. This is calculated by looking at your income and subtracting reasonable monthly expenses. Any additional money you have is then "disposable." He can take part or all of your tax return (which I am sure he has, every year) lottery winnings, inheritances and awards from lawsuits. If you had gone out and worked a second job, he would have taken that money too. You should listen to your attorney, turn over the money, and smile. Especially, if you get to keep half.

It may be worthwhile to pay your attorney to have the judge decide this. I'm not sure something that happened after you filed should be part of your bankruptcy estate, especially a judgment or an award for pain and suffering.

It is best to talk to an attorney in your state and within your jurisdiction to get the best advice. Get a second opinion from them.

Your question is hard to answer without a greater context. It also depends on which state exemptions you are using. However, in CO PI awards for pain and suffering are exempt and not income, so I don't see how the Ch 13 Trustee is entitled to any of it. Your attorney may be reluctant to go to hearing to challenge trustee. Your state exemption laws may be different. I would press your attorney for a better explanation, but I must caution you that in general attorney is finished when your plan is confirmed. Depending on how much money is involved you may want to speak to another attorney.

Question Detail: I read on the Internet some of your posts regarding receiving money after bankruptcy. I am kind of in a difficult situation. I realize that I am out of your state, but I was hoping that maybe you could help direct me where to go to get some much needed information. Unfortunately I had to file ch13 bankruptcy almost 5 years ago. I am almost done with my plan, but I had an unusual situation arise. About 7 months after I filed bankruptcy, I was involved in a personal civil act, which I took to court. In July of this year (9 months before my plan was to be completed?) my lawsuit settled, and I received a pain and suffering award. As I thought I should, I notified my attorney. At first she said that I could just pay the remaining months and be done with my plan, but now she is telling me that the trustees attorney is saying that I have to pay over 1/2 the settlement to the trustee. I have read many different things on the Internet, but can find anything factual. My case of action for my lawsuit happened after I filed for bankruptcy. So, do I just have to pay part of my settlement, or is there something that says I can keep it? Should I ask for the bankruptcy judge to look at the case ( even though my attorney says that I would just have to pay her money for this). I realize that you practice in a different state, and I already have an attorney, but could you please just give some unofficial advice? *- PAIN AND SUFFERING is the type of award that IS something the trustee can take part of to distribute to the pool of unsecured creditors - ABSOLUTELY (had it been a settlement, my advice would have been to label it "personal injury" if that was at all possible under the facts)

My unofficial advice is that the cause of action arose after you filed bankruptcy, and is not part of what you owed or owned at the time of filing. It is what we call post-petition. This goes along with the "two-entity" theory concerning bankruptcy. The first entity is everything you own and everything you owe on the date of filing. It is a new, separate and distinct legal entity which has a life of its own. You did not have this chose in action at that time, thus it is not part of your bankruptcy estate. It came into existence for the second entity, you the moment after the bkr was filed. Which is also a new, separate and distinct entity. In my opinion the settlement is not subject to what you have been told.

It does not matter when you receive the settlement. What does matter is when the incident occurred. If it happens after chapter 13 bankruptcy was filed, you have to pay the bankruptcy trustee.