Expert: Mark J. Markus- California Bankruptcy Attorney - 5/10/2008

Question
Hi,
I will soon need to file a Ch 7 bankruptcy but would like to know the following.
There is currently a pending class action lawsuit against a builder in CA, resulting from my previous ownership of a home which had defects in it's construction. This has been pending for over 4 years and although I have lost the home to foreclosure, I still retain the rights to the proceeds in this case. It is not known when it will settle or for what amount. Although it has been estimated at approx. $20k per claimant. I am now a resident of TX, the home was sold by the bank and I'd like to file a Ch 7 soon. How will this affect my case? Is this able to be claimed as an exemption? How much can be exempted? Should it be listed? If so, how? What would happen if I didn't list it? What will happen if this settlement is received before I receive my discharge? Is there a time frame after a discharge where any winnings or settlement amounts are your to keep?
I know this is a lot to ask but I don't have the resources to hire an attorney and will be filing on my own. Any advice or information will be greatly appreciated. Thank you in advance for your time and consideration.


Answer
Whatever interest you have in the rights to proceeds would be an asset of your bankruptcy.  Whether or not there are exemptions to protect that depends on Texas law (assuming that's where you've lived for the relevant portion of the 2 years prior to filing).  I have no idea what Texas exemptions laws are.