Expert: Terry Leeders - 2/16/2008

Question
My chapter 7 bankruptcy was discharged in July 2005.  This week I went to court to get approval for a structured settlement for an annuity that I received as a result of a car accident.  The lawyer for the structured settlement company had to request a continuance because the bankruptcy trustee won't return the phone calls from the settlement company that I am working with.  I spoke to the lawyer that handled my bankruptcy and he has spoken to the trustee and the trustee told the lawyer that he wants $5,000 for the creditors since I would get a little over $20,000 for the structured settlement.  Is this legal?  Can he try to get money from me so long after the discharge?  I did disclose the annuity during the discharge, I get $475 a month and the trustee is claiming that he was under the impression that it was a one time payment but I remember including it as a monthly payment with my income.  I cannot find the papers that I filled out (I don't know if I ever had them, I can't recall), I only have the papers that I got from the court.  How would I get copies of these, do I need to ask my former bankruptcy lawyer or get them through the court (no idea how I would do that)?  I'm not sure why the trustee had to be informed but the trustee is basically holding up the process.  If this is not legal, how do I report the trustee?

Answer
The trustee can offset any un-exempt portion of the injury settlement.  (each state's exemptions differ).  The trustee can go after the unprotected portion, regardless of how it was written on the bankruptcy forms, the true status is what matters.  Your attorney should have a copy of the schedules, or you could go to the court and pay to get a copy there as well.  The trustee is actually doing what he is supposed to here.  Any settlement is subject to bankruptcy court approval.  The trustee will then disburse the proceeds to your creditors.