QUESTION

On reopened chap 7 bankruptcy, interest paid to creditprs

Asked on Jan 07th, 2013 on Bankruptcy - Louisiana
More details to this question:
In Dec. 2008 I filled bankruptcy chapter 7 and discharged in Apr 2009. In 2011 I received notice that I would be receiving a settlement on a medical claim. Contacted trustee and informed him of settlement. Trustee reopened bankruptcy in Jan 2012, trustee received settlement funds for estate in Apr 2012. my question is, he is going to pay interest to creditors from Dec 2008 to present. Shouldn't they just receive interest from date of reopening and not the past 4 years since we didn't have any assets until Jan. 2012.
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1 ANSWER

Bankruptcy Attorney serving Burbank, CA
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While you don't state it, I'm assuming your medical settlement is yielding enough to pay more than 100% of your existing claims, otherwise interest wouldn't factor into it at all. When you receive the settlement is utterly irrlevant to the interest question.  Your rights to the medical settlement accrued prior to you filing your Chapter 7 bankruptcy case, otherwise the Trustee would have no rights to the settlement proceeds.   Thus, if interest is appropriate per the above, it would run from the date your case was filed I presume. You should check with a bankruptcy attorney in your area (assuming you don't already have one) regarding the possibility of amending your exemptions to protect some of the proceeds.   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.  
Answered on Jan 08th, 2013 at 1:15 AM

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