Is WC Lump Sum Award Exempt in Pa Chapter7 Bankruptcy

[CJM]

After 3 1/2 years, my workman's comp case resolved and I a lump sum check for lost wages and an ongoing weekly benefit check. Unfortunately, I didn't know it would have been better to file bankruptcy right from the beginning, instead of trying to hold on to my perfect credit rating, I also never thought it would take so long. Since I never received any money from the insurance company, I partially lived off my credit cards. Right before the settlement came, I had surrendered to tbe idea of bankruptcy, then 45k in debt and flat broke, no savings, no retirement left. I hadn't worked in almost 3 years., I am totally and permently disabled as a result of the work injury. So while trying to put together enough cash for filing a chapter 7, I had to stop making even the minumum payments, which tanked my credit if course. Before I could file, the judge's decision finally came, in 30 days tbe check came. I made settlements on 5 accounts, (total $10,00], paid off 5 more, (all 5 under $500), but the last 5 have refused to settle. A bankruptcy atty had advised that only $24k of settlement was protected in bankruptcy, snd to try to settle accounts before any judgements were entered against me, he also said I need to spend down the cash, if I wanted to file chapter 7 in the remaing $23k. I now question this advice, as I'm reading cinflucting info. In Pa, is any or all of this money exempt from bankruptcy? I alreafy bought a late model used car, as mind was recently totaled in accident, it's partially financed, Is it not subject to liquidation , since there's a lien holder? As these companies are not willing to settle even at 40%, which is far more Ryan I can really afford and I still need to hold onto a house downpayment, since I'm now on a very small fixed income , living in an apartment. Can, I or should I file for a chapter 7? I expect to keep any the $24k remaining?

[tony]

In Pa, is any or all of this money exempt from bankruptcy?

Yes. In P.A you can choose which is the most beneficial between federal or state exemptions - in your case both allow for worker compensation benefits to be exempt.
Not only is the settlement exempt, any property that is traceable to payment of comp benefits are also exempt.

What Property is Exempt from Liquidation in a Chapter 7 Bankruptcy in Pennsylvania?
Pennsylvanians considering filing for Chapter 7 bankruptcy are able to choose whether they want to use the exemption statutes that have been established by the federal government or those that have been established by the state. In most cases, the federal exemptions end up being more beneficial than the state laws. There are also some federal exemptions that can be used in addition to those established by the state.
The state of Pennsylvania permits you to exempt workers’ compensation benefits, disability insurance payments, pension accounts and retirement accounts.
http://www.yourphiladelphialawyers.c...-pennsylvania/

Federal Bankruptcy Exemptions
Choosing Between State and Federal Exemptions
To determine which set of exemptions is best for you -- state or federal -- make list of your property and it's value. Then compare what property you can keep under each system. (To learn more about bankruptcy exemptions and how they work, see Bankrutpcy Exemptions -- What Do I Keep When I File for Bankruptcy?)
https://www.thebankruptcysite.org/ex...s/federal.html


Lump Sum Workers’ Compensation Settlement Exempt under 522(d)(11)
Posted by NCBRC - February 11, 2015
Contrary to majority opinion, proceeds of a lump sum workers’ compensation settlement were found to be exemptible under section 522(d)(11)(E), to the extent necessary for support of the debtor and his dependents. In addition, a Medicare “set aside” is not property of the estate. Carr v. Arellano (In re Arellano), No. 14-990 (Bankr. M.D. Pa. Jan. 5, 2015).

Section 522(d)(11)(E) permits a debtor to exempt “property that is traceable to . . . a payment in compensation of loss of future earnings of the debtor . . . , to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.”
http://www.ncbrc.org/blog/2015/02/11...-under-522d11/

Consult and retain a bankruptcy lawyer to protect your rights and make the best decisions based on the facts of your case.

Tony

[CJM]

Thank you, thank you so much, I was really confused about this, now I'm greatly relieved and can get on with hiring qualified atty to file bankruptcy.

[Nick Thompson]

In Pennsylvania, the WC lump sum award is exempt from bankruptcy proceedings.
This means that a debtor may not file for Chapter 7 bankruptcy and expect to receive a discharge of his or her debt.