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civil lawsuit settlement pending

I have a civil lawsuit pending with a possible award of $9,500.00. It has been filed 2 years ago and seriously impacted my financial situation today, which is now catastrophic. If the suit is settled and the judgement awarded, will it have to be surrendered in full to the trustee. We would like to use some of it to move to reduce our monthly expenses.

Posted from: Ontario

One Response to “civil lawsuit settlement pending”

A licensed trustee said...

If you have already filed for bankruptcy then your trustee will get to decide whether or not to settle the suit and the funds should be paid directly into your bankruptcy – in other words they will not be available for your use.

If you’ve filed, but you haven’t told your trustee about the lawsuit then you should do so immediately. If the Bankruptcy Court finds out on their own about your lawsuit it might place your entire bankruptcy proceeding in jeopardy. (In other words if the Court oe your trustee find out about the lawsuit from someone other than you your bankruptcyu might be cancelled.)

If you haven’t filed yet and the suit settles before you do then you’ll have to provide your trustee with an accounting of what you do with the money. In this case, depending on what you do with the funds, you may have to pay a portion of the money into your bankruptcy.