This month I am about to file Ch. 7 in Florida. Back in Maryland where I used to live, I signed a separation agreement in Feb 2014 which stipulated all of the details of how we will divide our assets. I own no property, only receiving alimony plus a future $50k via a QDRO from his 401k to mine. He won't be filing the divorce petition in MD until July 2015 (I didn't move out until July 2014). Thus our divorce probably won't be finalized until approximately Oct 2015 (or so) which is when the QDRO would then be initiated. I have a FL attorney telling me that the QDRO "the way it is worded" might be considered a lump sum payment award and thus be subject to seizure by the bankruptcy trustee; this month even though I'm not set to receive it until at least 9 months from now. Is this true?
It will depend on what exemptions you are eligible to use, but since QDROs are tied to retirement accounts, one can usually claim this asset as a retirement benefit, since that is the what it actually is. For me to common on problems with the specific wording of a court document would be irresponsible. You are going to need an in person second opinion. Hope this perspective helps!
Attorney Bunce states it like it is..but the FIRST ISSUE IS WHAT STATE EXEMPTIONS CAN YOU USE? If you have lived in Florida MORE than 2 years before the filing date, FL law governs, if not, then another state law may in fact govern depending on how long you lived in the years before the 2 year rule! Good luck.
I agree with Ms. Bunce and Mr. Granvold. Usually QDROs concern retirement accounts and usually are exempt, but it is possible that the drafting of the QDRO in your case could have left it open to attachment by your bk trustee. The attorney you consulted with has had the opportunity to review the QDRO, we have not. If you have questions, I urge you seek advice of another experienced bankruptcy attorney in your area.
Florida law “opts out” of the federal exemptions with one exception. Florida “opted in” for Section 522(d)(10) of the bankruptcy code. Please read it carefully because, in my opinion, it absolutely protects your future right to receive the lump sum alimony payment. Although amazing, I see many Florida bankruptcy attorneys (and trustees) that get this wrong. Be careful and get a second opinion if your current counsel is unaware of this.
It is not clear from your question whether you are referencing a Florida Family Law attorney or a Florida Bankruptcy attorney who advised you with respect to the implications of the wording of the QDRO. I would discuss the meaning and finality of the separation agreement and the QDRO with BOTH of your attorneys. In some instances, the rights of a debtor and the trustee can be affected by the timing of your case. Your exemptions depend on your period of residency and the trustee's entitlement may depend on when an asset is received or when it becomes a vested right. A vested right is one where all of the conditions to entitle you to something have occured even though we may not know when your right will be satisfied or exact amount due. This could occur because you are injured in an accident against an at fault driver, or entitled to an inheritance, a tax refund or a future divorce settlement. Depending on the exact nature of the attorneys concerns, you should discuss the concern with the QDRO with your bankruptcy attorney in case it affects their advice about when to file. It also sounds like the issue might still be addressed by modifying the QDRO (which has not been signed by a Judge?) or the separation agreement, depending on the attorney's concern.
