When there’s no other option, bankruptcy is an effective tool to shield you from your creditors. But often, those filing bankruptcy do not consider how intrusive a bankruptcy can be. After filing bankruptcy, your remaining assets are put under a microscope by the bankruptcy trustee. Every transaction you make while in bankruptcy, and 90 or more days beforehand, are scrutinized, questioned, and may even be reversed.
Any windfall you acquire while in bankruptcy must immediately be reported to the bankruptcy trustee to be distributed to your creditors, or added to your payment plan. Winning lottery tickets, inheritances, bonuses, and, surprisingly enough, pending lawsuits, may all be considered assets which must be reported to the trustee. It sounds odd, but if you are a plaintiff in a lawsuit and stand to be awarded some money, the lawsuit needs to be disclosed to the bankruptcy court so that the proceeds can be distributed to the creditors.
Delivery driver Willie Thomas suffered devastating injuries when his delivery truck was struck from behind by Defendant Wanda Harris. Thomas was pinned between the two vehicles, later needing multiple surgeries to repair the extensive damage the collision caused. Thomas filed a lawsuit against Harris and her insurer. During the deposition, it came out that Thomas had filed a Chapter 13 bankruptcy about 15 months before the accident. The defendants filed a motion for summary judgment on the grounds of judicial estoppel.