Do I owe This?

YOUR bankruptcy lawyer is suing you?  That seems HIGHLY unlikely and doesn't make any sense based on your facts.  I assume you meant that the bankruptcy trustee in your case (who is NOT your attorney and does NOT represent you) is suing you, and yes that is completely appropriate if you did not exempt the possible proceeds from the medical claim you had. You may be able to exempt (protect) a portion of the proceeds depending on what exemptions you had available under applicable law on the date your case was filed.  Exemptions are "protections" for value you have in certain assets such that they are "exempt" from collections.  Every state has different exemptions amounts available. Exemption laws are based on the state where you resided for the 2 years prior to filing your bankruptcy case or, if you lived in more than 1 state during that period, in the state where you resided for the greater part of the 180 days prior to that 2 year period.  You need to HIRE an experienced bankruptcy attorney to review all the correct facts of your situation and advise you on your options, including representing you in the pending lawsuit by your Trustee.  And you need to do it immediately. If it is actually your bankruptcy attorney suing you, then you need to find a NEW attorney and probably file a complaint against your old attorney with your state bar. Mark Markus has been practicing exclusively bankruptcy law in California since 1991.  He is a Certified Specialist in Bankruptcy Law by the State Bar of California Board of Legal Specialization,  AV-Rated by martindale.com, and A+ rated by the Better Business Bureau.