Bowen Ten Cardani, PC

Call Us For Your Initial Consultation


Court commands settlement winner to repay debt

Virginians who file for bankruptcy aren't necessarily guaranteed that their future earnings will be excused from old debt. In one August ruling, a bankruptcy court judge decided that a man who had filed for Chapter 13 and had the plan confirmed must use the funds he later received from a motor vehicle accident settlement to repay his debtors.

The debtor's original Chapter 13 bankruptcy plan was approved three years prior to his involvement in a car accident. After the incident, he changed his debt schedule to indicate the fact that he might receive a settlement, and the court decided that because the money he received went towards replenishing his estate, some of the proceeds must be diverted to the creditors.

The court rejected the man's claims that he needed the entirety of the settlement monies to pay for his increased living costs and continuing medical bills. Of the original $196,845 award, he only received $74,067. Notably, the man was barred from even claiming this amount until the creditors had been paid properly. The estate-replenishment approach to determining who benefits from property gained following Chapter 13 is just one guideline among many, but more courts are using it to make their decisions.

Although filing for bankruptcy is often a good way for individuals to manage their debt, it's important to choose the correct kind of filing and plan ahead. Chapter 13 may be used to protect property and put an end to creditor harassment, but the efficacy of such actions depends on what kind of repayment plan filers submit. Those with questions about which options might suit them best may benefit from talking to an attorney in advance.

No Comments

Leave a comment
Comment Information
Email Us For A Response

We’re ready to work with you.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Bowen Ten Cardani, PC

Richmond Office
3957 Westerre Parkway, Suite 105
Richmond, VA 23233

Toll Free: 866-601-7371
Phone: 804-767-6850
Richmond Law Office Map

Ashland Office
9410 Atlee Commerce Blvd, Suite 2
Ashland, VA 23005

Toll Free: 866-601-7371
Phone: 804-767-6850
Ashland Law Office Map

Rated By | Super Lawyers | Rising Stars Britney McPheron
Super Lawyers | K. Matthew Long