Expert: Mark J. Markus- California Bankruptcy Attorney - 7/3/2008

Question
Hello, we filed for bankruptcy in the beginning of June. It is now July. We received a severance payment for my husband from when he played in the NFL about 10 years ago. We received this money on July 3. We did not know it was coming, but some rules recently changed and they sent out checks. Do we need to disclose this to the trustee or is it exempt because we received it after we filed for bankruptcy? We have not cashed it or put it in the bank. Thanks.

Answer
That is a great question.  I guess the first question I'd ask is, how much was it, and did you have any exemptions available that would have covered it had it been received before you filed your bankruptcy?  If the answer is no, then the next question becomes whether or not he was entitled to this payment prior to filing the bankruptcy case (regardless of whether you knew about it).  If the answer is yes, then it must be disclosed to the Trustee (technically).

My suggestion is that you consult with the lawyer who handled your bankruptcy case (or another lawyer in your area), since there is probably going to be some research done on this to clarify everything.