Are Insurance Commission Residual Payments Exempt In Bankruptcy?

I was at bankruptcy court yesterday for some of my clients' creditor/trustee meetings. While waiting for my clients cases to be called I listened to a interesting case involving an insurance salesman. The insurance salesman (debtor) told the trustee that his commissions from current sales was declining, but that he had been living on residual commissions for prior year’s sales. The trustee told him that the residual income was not exempt and that the money must be turned over to the trustee. The debtor’s attorney disagreed because, he said, that the debtor was head of household and that commissions from the past sales represent the exempt earnings under the Florida statute that protects head of household income.

In my opinion this trustee is correct and that the debtor’s residual commissions are not exempt head of household commissions. The Florida statute exempts all earnings of a head of household including wages and commissions. Current commissions deposited in the debtor’s bank account within the last six months are exempt in bankruptcy. Bankruptcy courts have protected deferred compensation in some cases. Residual payments are different. The debtor’s right to insurance residuals is a contract right and is a form of account receivable. Residuals are due, not when the agent sells the policy because of current efforts but are due when the insured pays annual insurance premiums to maintain an existing policy. I have not researched the issue, but I suspect that a trustee can reach residual income due when an insured pays continuing insurance premiums.