The 2 year wait during a chapter 7.

[Karceno888]

Hello all,

I have a friend who just got her OK on a chapter 7 after her court conference call.

Her attorney said she will have to wait 60 days for the official discharge.

She also was told that any money she gets outside of the BK 7 needs to be reported for up to 2 years (she has an inheritance and possible workers compensation case that has yet to settle). Her attorney said that only 10K of that money is exempt and any additional money over 10K will need to go back to her creditors.

My question is this: How diligent are the trustees in these situations? What happens if she doesn't pay (assuming she gets a big payout on the WC)? Can she just ignore it all and let the chapter 7 get dismissed? Or is this a criminal offense if she doesn't report any big amounts, she gets within that 2-year period?

Hope this all makes sense.

I was really surprised that she has to go 2 years for all of this, and that the chapter 7 just won't wipe everything out. Doesn't make sense to me.

Thanks.

[shipo]

I will let others opine on what the Trustee may or may not do, but will say this, your friend will be playing with fire if they don't comply with the terms of the deal.

[Karceno888]

I will let others opine on what the Trustee may or may not do, but will say this, your friend will be playing with fire if they don't comply with the terms of the deal.

Yes, absolutely.

She is hoping the settlement was pass the 2 year wait, of course.

Transparency is key in these situations.

[justbroke]

Generally, the Trustee can wait as long as necessary for a "known" claim that arose before the bankruptcy. I would not count on the two year number, and I'd cooperate as much as necessary. I would say that the Trustee that knows that there are outstanding assets of the bankruptcy estate, will plug themselves into the matter and will seek periodic updates. The Trustee may, in fact, keep the case open for a year or two just to make sure they don't forget.

[Karceno888]

Generally, the Trustee can wait as long as necessary for a "known" claim that arose before the bankruptcy. I would not count on the two year number, and I'd cooperate as much as necessary. I would say that the Trustee that knows that there are outstanding assets of the bankruptcy estate, will plug themselves into the matter and will seek periodic updates. The Trustee may, in fact, keep the case open for a year or two just to make sure they don't forget.

Sounds like my friend did the right thing to disclose this information about their case and potential big pay out.

Boris Becker comes to mind when people want to play games with BK.