Personal Injury Awards And Bankruptcy In Colorado
When you file bankruptcy, all of your assets and property is divided into two categories: exempt or non-exempt. Exempt property is protected. The trustee cannot compel you to sell or surrender the property or use it to pay your creditors. Non-exempt property, as you might expect, is not protected. The trustee can force you to surrender the property so that she can auction it off and distribute the cash proceeds to your creditors. Your bankruptcy attorney’s job is to make sure that you keep as much of your property as possible and make you aware of the possibility that any of your property is non-exempt. Certain pre-bankruptcy planning may be necessary to convert any non-exempt property into exempt property.
If you have received a personal injury award, it will be exempt. Colorado Revised Statute 13-54-102(n) is the law that protect personal injury awards and exempts the “proceeds of any claim for damages for personal injuries suffered by any debtor except for obligations incurred for treatment of any kind for such injuries or collection of such damages.”
If you have any concerns about whether any of your property or assets are protected from the bankruptcy trustee, you should talk to Colorado bankruptcy attorney right away.
