After you file for Chapter 7 bankruptcy, essentially all of your property at the time you file for bankruptcy will become property of your bankruptcy estate, and will likely be used by the trustee to pay back your creditors. This includes any asset that you have an interest in at the time of filing, which may extend to a company bonus, even if you have yet to receive it.
The ruling on whether your company bonus will be accessible to your creditors depends on whether you had the right to receive the bonus before or after the time you filed for Chapter 7 bankruptcy. For example, if your bonus was based on personal performance and the performance goal was met prior to filing for bankruptcy, then the bonus is usually not exempt, and it must be turned over to the trustee for your creditors. This question is very tricky though, and it contains different regulations and limitations based on the specifics of your individual set of circumstances. Hence, it is very wise to contact an experienced bankruptcy lawyer in West Palm Beach in order to make sure that you understand the rules that apply to your case.
Even if the bonus was earned prior to filing for bankruptcy, you may still be able to exempt it based on state law. Each state has a set of exemptions that allow a debtor to protect certain assets, and a local lawyer will be able to iron out the exact laws of your state. You will want to ask about state laws that allow you to protect a certain amount of property, in which case the exemption of your bonus may depend on the amount of property you already have exempted.
If you find yourself facing a Chapter 7 bankruptcy and are wondering about the specific exemption laws that apply to your property, Kelley & Fulton would like to extend a helping hand. We invite you to come in today and speak with an experienced bankruptcy lawyer in West Palm Beach. When we meet, we’ll get to know the precise details of your case, and then advise you on the best possible course of action.