Sometimes individuals end up going bankrupt because their personal circumstances changed and they are no longer able to meet their financial obligations because they have become injured and are not able to work. Based on this they may be involved in a lawsuit where they are going to receive a cash settlement. The question raised then is how does this cash settlement affect the bankruptcy?
The first important step when deciding to go bankrupt is to use the services of a qualified Ohio bankruptcy attorney. What is going to be important in this particular case is whether the state where the bankruptcy is taking place allows for Federal bankruptcy exemptions. The details of the lawsuit settlement will partially dictate how it is handled in your Ohio bankruptcy.
Generally speaking any money you are going to receive will be put into your bankruptcy estate. It is all going to come down to the way your exemptions are handled. In some states you have the choice to use the Federal exemptions or the state exemptions. In other states you are compelled to use the state exemptions. This will all determine the outcome of what happens to the money from your lawsuit. If you have a choice of which exemptions list you can use it is important to study them carefully to see which will be most advantageous to you. This is something your bankruptcy attorney will advise you on based on the information you provide him with. Federal exemptions may allow you to exempt a portion of your settlement depending on the circumstances of the lawsuit itself.