Is my personal injury settlement exempt/protected during a Chapter 7 bankruptcy?
In short: In California, pursuant to the Code of Civil Procedure, debtors can select one of two exemption systems (703 and 704). Under 703, a debtor is entitled to protect a “wild card” amount of approximately $23,250 (703.140(b)(5) and additional amount of $22,075 (703.140(b)(11)(D)(E) for personal injury settlements. Thus, personal injury settlements can be protected up to both combined amounts (assuming the wild card exemption is not used for other personal property).
Under Code of Civil Procedure sections 704.140 and 704.150, a debtor can protect personal injury settlements that are “necessary for support” of the debtor(s). If the settlement is in the form of an installment payment, at least 75% of the payments are exempt.
It is crucial to select the proper exemption system to protect not only your personal injury settlement, but also your other assets. Choosing the wrong exemption system may lead to assets not being exempt and having your assets seized. It is crucial to select experienced Bankruptcy Attorney Orange County, Gregory E. Nassar. As an experienced Bankruptcy Lawyer Orange County, Gregory E. Nassar will review the case, carefully evaluating all assets, and select the appropriate exemption system. These 703 and 704 exemption systems apply to Chapter 7 Bankruptcy Orange County and Chapter 13 Bankruptcy Orange County.