Anyone know what percentage of an inheritance the trustee would get?

[espo1357]

The inheritance would cover the Chapter 13.

Also, does the trustee even have to find out about the inheritance? Don't recall that being discussed at all.

Its all a joke anyway, this bankruptcy BS. Sometimes I wished I never filed. One thing for sure, they are not getting the inheritance, as I will just stop paying the 13, and get my case dismissed, and lose protection.

Especially with a home still 100k under!

[newbie2]

The inheritance would cover the Chapter 13.

Also, does the trustee even have to find out about the inheritance? Don't recall that being discussed at all.

Its all a joke anyway, this bankruptcy BS. Sometimes I wished I never filed. One thing for sure, they are not getting the inheritance, as I will just stop paying the 13, and get my case dismissed, and lose protection.

Especially with a home still 100k under!

You really need to take a deep breath and think about your actions. Walking away from your Chapter 13 and NOT informing your attorney and the trustee about the inheritance can have significant long term ramifications.

I'm going to be blunt..you voluntarily entered in to a Chapter 13 plan. You wanted the courts protection and you received it. In return for that protection there are rules that we all have to play by. Own up to your actions and don't make a mistake that could haunt you for years to come.

Edited to add: Keeping a home that is under valued $110K was also your decision. You can still amend your petition to surrender it.

[Pandora]

I thought after you were confirmed and 6 months have passed - any inheritance didnt matter - that it was yours to keep and didnt have to be reported to the trustee? (at least thats what our lawyer told us....)

Did you just find out about this inheritance now or did you know when you filed? I know that was one of the questions that was asked on our paperwork and by our lawyer and the trustee at our 341 - was were we expecting any inheritance or listed as a beneficiary on any policies (other than spouses).....

[newbie2]

I thought after you were confirmed and 6 months have passed - any inheritance didnt matter - that it was yours to keep and didnt have to be reported to the trustee? (at least thats what our lawyer told us....)

Did you just find out about this inheritance now or did you know when you filed? I know that was one of the questions that was asked on our paperwork and by our lawyer and the trustee at our 341 - was were we expecting any inheritance or listed as a beneficiary on any policies (other than spouses).....

The OP is an a Chapter 13. Completely different than a 7 in more ways than one.

[Pandora]

The OP is an a Chapter 13. Completely different than a 7 in more ways than one.

I'm in a CH. 13 as well... so dont know where the 7 came into play in your reply ??

[debtinohio]

This is money you owe for debts you incurred, of course it's reasonable for them to take any money that comes your way.

[justbroke]

The OP is an a Chapter 13. Completely different than a 7 in more ways than one.

I'm in a CH. 13 as well... so dont know where the 7 came into play in your reply ??

The 180-day rule does not count in a Chapter 13. This is well accepted caselaw. A Chapter 13 remains pending for years. Because it's a pending bankruptcy and because you pledge "all disposable income" over the course of the plan duration in exchange for the court protecting you from creditors... any inheritance is included.

You know, that 180-day rule was put in there specifically because of people who wanted their cake and eat it too. The Courts were tired of people filing for bankruptcy when their Uncle Bob was on his deathbed, so that the creditors couldn't get to the inheritance. Unfortunately the 180-day rule doesn't apply in a Chapter 13.

While you can voluntarily dismiss a Chapter 13, a "smart" Trustee can object and motion to convert to a Chapter 7 liquidation. You need to be "smart" yourself and think about what you're doing. Perhaps you can dismiss the Chapter 13 and negotiate with the creditors.

As an aside, I don't understand why anyone would keep a home that is $110K underwater, unless the home's current FMV is $1,000,000(+).

[espo1357]

The 180-day rule does not count in a Chapter 13. This is well accepted caselaw. A Chapter 13 remains pending for years. Because it's a pending bankruptcy and because you pledge "all disposable income" over the course of the plan duration in exchange for the court protecting you from creditors... any inheritance is included.

You know, that 180-day rule was put in there specifically because of people who wanted their cake and eat it too. The Courts were tired of people filing for bankruptcy when their Uncle Bob was on his deathbed, so that the creditors couldn't get to the inheritance. Unfortunately the 180-day rule doesn't apply in a Chapter 13.

While you can voluntarily dismiss a Chapter 13, a "smart" Trustee can object and motion to convert to a Chapter 7 liquidation. You need to be "smart" yourself and think about what you're doing. Perhaps you can dismiss the Chapter 13 and negotiate with the creditors.

As an aside, I don't understand why anyone would keep a home that is $110K underwater, unless the home's current FMV is $1,000,000(+).

thanks for the input.
yes, it doesn't make sense anymore. I thought the home was worth more, but even with the second stripped, its still way under.

the inheritance might still be months or years away (I am just trying to plan ahead) and it is good to plan ahead. I do know that it will not be for peanuts, and the person passing the asset down was very frugal, so it could be very good sum. my point was, why lose the inheritance just to protect a home that is already under and other creditors that will have a hard time securing a judgement (cases do not even have a court date).

besides, I can live in the home for close to a year, rent free.

[debtinohio]

Perhaps have them modify the will to put it in trust for your children (if you have any). This was my thought, since the kids need it more than me anyway.

No idea on the legality of this :-)

[HHM]

I am not sure why people freak out over this issue. I guess it is the vision of dollar signs in their head when they see the inheritance. However, if you really think about it, the situation is a wash...what are you actually going to do.

1. If you had not filed BK 13, and got the inheritance, you would probably have used it to pay off your debt or some portion of it anyway?
2. If you are in a 13, it is more cost effective to pay off the 13 than dismissing. If you dismiss, all the debt comes back to life and you are back to square one and most of the time, it will cost you more to resolve the debt at that time.

In the BIG picture, it would be a very rare set of circumstances where it made sense to dismiss a chapter 13 because of a large inheritance. The GOAL is to be out of debt; initially, you were using chapter 13 to do that, if an inheritance comes along, then you use it.

[justbroke]

Well said HHM.

[debtinohio]

It just comes back to "having one's cake and eating it too".

Some want the protection of BK and reduced debt payback but want to be able to keep any and all extra money they receive during, even if it would have paid back the money in full that they, themselves, borrowed and signed for.

[espo1357]

I am not sure why people freak out over this issue. I guess it is the vision of dollar signs in their head when they see the inheritance. However, if you really think about it, the situation is a wash...what are you actually going to do.

1. If you had not filed BK 13, and got the inheritance, you would probably have used it to pay off your debt or some portion of it anyway?
2. If you are in a 13, it is more cost effective to pay off the 13 than dismissing. If you dismiss, all the debt comes back to life and you are back to square one and most of the time, it will cost you more to resolve the debt at that time.

In the BIG picture, it would be a very rare set of circumstances where it made sense to dismiss a chapter 13 because of a large inheritance. The GOAL is to be out of debt; initially, you were using chapter 13 to do that, if an inheritance comes along, then you use it.

yes, but not when you are doing the 13 to protect a home underwater (assuming the inheritance is large), the very rare set of circumstances, I guess.

Besides, I could always file a 7 down the road, when I get downsized again, because downsizings are common in my business.

It all comes down to the bottom line, and it does not seem like the creditors have much leverage anyway, other than garishment.

[justbroke]

It all comes down to the bottom line, and it does not seem like the creditors have much leverage anyway, other than garishment.

The term used to describe people who play the shell game is professional debtor. Depending on your State of residence, there is garnishment as well as levies. How would you like your bank account levied? How about the prospect of that happening over the next 20 years? Is a 25% garnishment of your earned income okay with you? If you end your Chapter 13, what about the at least $110K deficiency on the home? Not to mention all the other unsecured debt that comes back at your with full force and accrued and accumulating interest?

yes, but not when you are doing the 13 to protect a home underwater (assuming the inheritance is large), the very rare set of circumstances, I guess.

But why would anyone do that? It's counterintuitive and in the end, you just wasted money. That's why at least two posters (including myself) suggested that keeping an underwater home is not worth it.

You are also counting on being downsized and filing Chapter 7?

In the long term, a bankruptcy might be the best option, even if it's a Chapter 13. Had I continued my Chapter 13, I still would have discharged $412K of unsecured debt. I would rather have done that then have 20 years of judgments on me.

[espo1357]

The term used to describe people who play the shell game is professional debtor. Depending on your State of residence, there is garnishment as well as levies. How would you like your bank account levied? How about the prospect of that happening over the next 20 years? Is a 25% garnishment of your earned income okay with you? If you end your Chapter 13, what about the at least $110K deficiency on the home? Not to mention all the other unsecured debt that comes back at your with full force and accrued and accumulating interest?

But why would anyone do that? It's counterintuitive and in the end, you just wasted money. That's why at least two posters (including myself) suggested that keeping an underwater home is not worth it.

You are also counting on being downsized and filing Chapter 7?

In the long term, a bankruptcy might be the best option, even if it's a Chapter 13. Had I continued my Chapter 13, I still would have discharged $412K of unsecured debt. I would rather have done that then have 20 years of judgments on me.

its a certainity that I will be let go of my job soon, so, its better to do the 7 eventually, isn't it?