Inheritance Question

[$$only4ever]

I need someone to respond to my thread that is very knowledge with Chapter 13-Old Law. I am in a 60 month Chapter 13; have paid 24 payments; 36 to go. My mother recently passed away and according to her will, has left me a small sum of money, approximately $6,000. I know that this money has to be turned over to the trustee as it is part of the BK estate. My question is: Is the money applied to my plan and it shortens the length of the plan, or can the trustee take the money, distribute to the creditors and not shorten the plan? I already spoke to my attorney. He advised me to sit tight and go through probate. Once I receive the $$ to contact him. He is hopeful that the trustee will apply the $$ to the confirmed plan, but said that he is not sure that the trustee won't gobble up the money. Again, I know the trustee gets this money...it would be nice if it went to my plan so the length of my plan would be shortened and I could get out of BK hell sooner. Thanks for any advice.

[wooisme]

it's too bad she didn't spell out in a will that you would get the money at a later date (like after the plan was done) that way you would not be going through this right now.

I have a friend who declared bankruptcy a few years back and she had her mother rewrite her will saying that she could not even get her money until a certain year. of course her portion was much larger than $6k

I would imagine it would depend on how much your paying your creditors back? If it were at 100% they probably wouldnt even care.

[CATCHMEIFYOUCAN]

Yeah, UNFORTUNATELY if you are ONLY paying a percentage, that money is just EXTRA money for the creditors !

Best Of Luck, CatchMeIfYouCan

[SinkingFast]

There's a Member who actually went thru receiving an inheritance during Ch 13:

http://www.bankruptcyforum.com/showthread.php?t=8498

It seems the inheritance did not shorten the length of the plan. But BKBiker did not give the specifics of his modified plan.

[lrprn]

I know the trustee gets this money...it would be nice if it went to my plan so the length of my plan would be shortened and I could get out of BK hell sooner. Thanks for any advice.

In the Ch 13 cases I've read related to inheritance during bk, the wording of the will (or the lack of a will) guided what the trustee could do. In most cases, the trustee did take the money and distributed it to creditors - you're right about that. And I'm sorry to say that usually what happened is that the creditors just got a larger payback amount - the debtor's plan wasn't shortened.

The exception to this in your case would be if your $6,000 created a 100% payback to all the creditors who filed claims in your case. Then your plan will be shortened. You can't be forced to keep on paying after your creditors have been paid their claims in full, no matter how long your case was scheduled to run initially.

Your lawyer is right - best to wait to see what happens in probate. Then he will negotiate with the trustee to can see what can be worked out in your case.

[$$only4ever]

Just curious.......how would the trustee even know about the inheritance if I don't tell him. The will and estate will be executed in another state. I don't have to submit my tax returns and I do not have to claim this amount to be taxed. I believe it falls within the exemption amount.

Don't get me wrong. I will be honest, but I remember a prior poster getting reamed by the trustee because he did the right thing.

It just makes me mad that the screwing goes on forever....my DH was told that he will need 2 knee replacement surgeries to the tune of $3500-$4000 out of pocket expenses for each and I can't afford that, but God forbid let us make sure that Citibank is taken care of. Of course all my attorney can say is "I don't know." I can't go through that again. That is all I put up with throughout my entire BK filing and confirmation was his I don't know answers.


Sorry for venting, It has been a very tough sad week.

[aa06a47]

A very good question $$. There are a few ways that come to mind...1) someone who knows about the bankrutpcy is peeved off that your keeping your inheritance rather than giving it up calls the trustee and tell. This I understand is usually an x-spouse or an "x-Friend". 2) They do an asset search on you prior to giving the discharge. I know my attorney typed in my ss# into a program at her office the day I was in there, and bam, it showed my house, my lot property, some land I use to own...I was like Damn. It also showed any legal hearings, which probate would definatly be one that would show up. I am not sure what data base she was in. Do they do this before the discharge?...I don't know. 3) I have also heard of creditors doing the same thing and then filing a protest to discharge if they find some assets that were not listed.

One thing I do know, is that the trustee does find out from time to time by people who receive inheritance and are trying to hide it.

If the inheritance is relative small, say the 6K, and you can show that you need a surgury that will cost 7K and need the money, I think most trustee's will allow you to keep it.

[aa06a47]

Another thing I would like to add, under the old law, your only required to committ all disposible income for 36 months. If the plan last longer than 36 months, and you receive the inheritance after the 36 months, you really should be able to keep any and all money obtained from the inheritance. If the will must go through probate, you should try and delay it until after the 36 month mark if at all possible.

[CindyLou]

I would certainly ask the judge to let you keep it for the surgery..............
My brother is in a 13. My parents ammended their will so that he gets nothing. Myself and my other brother would get everything and then have to settle up with him once his bk is done.