Can I File for Bankruptcy and Keep My Wrongful Death Proceeds?

Yes. When you file for bankruptcy you can claim certain things i.e. proceeds from personal injury and wrongful death awards as "exempt" and keep them. California gives debtors a choice between the state law exemptions found in Code of Civil Procedure section 703 and the exemptions in section 704.

Section 703 provides that payment for the wrongful death of an individual of whom you were dependant on is exempt to the extent reasonably necessary for support of yourself and your dependents.

Section 704 also provides that a settlement arising out of the wrongful death of your spouse or a person on whom you were dependent on is exempt to the extent reasonably necessary for support. However, 704 also states that periodic wrongful death payments may be garnished to pay off other money judgments an individual may have. Because of this, the section 703 exemption is a better choice for bankruptcy debtors who owe money judgments.

Categories: Chapter 13, Chapter 7