Worker's Compensation Benefits and my Florida Bankruptcy
Some of my clients have asked me about workman's compensation benefits and whether or not these benefits must be turned over to the Trustee in a bankruptcy. Trustees may try and ask the bankruptcy court to make the debtor turn over these proceeds but Florida statute 440.22 provides that these benefits should be exempt from all creditors (except for alimony or child support).
What if the debtor settled a workman's compensation claim? The bankruptcy court for the Middle District of Florida has issued case law opinions declaring that even these types of settlements are protected. What if, after the settlement, the debtor deposits those proceeds into a bank or investment account? Do they lose their exempt status?
Again, the middle district bankruptcy court says these funds do not lose their exempt status and are protected from creditors (except for domestic support obligations).
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Greg Gilbert
Keith Maynard
