then where the debtor lives.Insurance From a Personal Injury:
The first question to ask is “when did the injury or death occur?” If it’s insurance due to a personal injury accident and the injury occurred after filing the bankruptcy”, then you’re entitled to keep the proceeds free and clear. If the personal injury occurred before the bankruptcy certain rules apply. First you must show the potential money in your bankruptcy schedules. Next you have to claim the Oklahoma exemption for personal injury. Lastly the funds are 100% yours up to $50000.00.
Insurance From a Will or Trust:
If its from a life insurance claim and the death occurred six months or more after filing,” then you’re entitled to keep the entirety of the proceeds. If the death occurred within six months of filing or before filing, or if the accident occurred before filing, then the funds are considered part of the bankruptcy estate. At that point, where the debtor lives determines what happens. Where the debtor lives determines what set of exemptions apply to the bankruptcy estate. If its filed in Oklahoma than we use Oklahoma exemptions. In Oklahoma you may lose the money to the bankruptcy trustee. If so the Trustee will keep the money and pay it towards your debt.
Oklahoma Bankruptcy Exemptions:
Debtors living in Oklahoma are very fortunate. Oklahoma opted to write its own bankruptcy exemptions, and they contain a generous provision for insurance proceeds. If an accident or death occurred during a period where the proceeds from insurance would become property of the estate, Oklahoma debtors may exempt up to $50,000 of the insurance proceeds from the bankruptcy estate.
It is critical, however, that this money be handled properly. In order to be exempted, the funds must be traceable back to the insurance claim. That means they cannot be “commingled” with other types of assets or money. The best way to separate out the insurance money is to put it in its own separate bank account that contains nothing but those funds. By making a separate account, the debtor can ensure that the $50,000 they are entitled to keep goes untouched by the bankruptcy court.
Contact a Tulsa Lawyer:
If you’re considering a fresh start and wondering about insurance settlement money in bankruptcy we can help. Just like many other assets insurance money in a bankruptcy is exempt. This means its yours to keep so long as you qualify. Call today for a free consultation with a bankruptcy attorney.
