Just Filed & Father Died

[pigpen75]

I just filed for Chapter 7 and signed about 2 weeks ago. Around that same time my father passed away leaving me with about $30,000. I haven't recieved the money yet but i'm assuming I will get it in the next week or two. I called my laywer today and he told me the best addvice he could give me would be to not go to any hearings and it should be automatically dismissed. I will still however have my debts which would be about $40,000. If its dismissed I'm also assuming I'm gonna have to eat the $1500 lawyer fees. I'm just wondering if I have any other options and what advice you guys can give me. THanks

[adaughter]

sorry about your dad passing away, what a difficult situation. as for your dilemma I was wondering do you want to keep all the money? why cant you just make it an asset case and give up the money-keep whatever is exempted in your state and still get discharged for the whole amount? I'm sure the trustee would understand like life happens. I don't know how all the laws work though but thats what seems fair to me. you should ask around with some more lawyers maybe your lawyer just doesn't want to put in the extra work you never know.

oh and also another option could be calling your collection agencies and see if they are willing to setting for half or less than half the amount you owe. Because once you've filed for bk they will settle asap then maybe you can even have some money left over if that works! Try to settle with them before the bk could be dismissed though since then they will probably go after the whole amount of debt if it is dismissed.

[TEW]

I'm sorry to hear about your Dad,
I don't see where letting your case get dismissed is going to be a good thing for you.
If like the other poster said you and you work a deal to pay half they are going to send you a 1099 and you are going to pay tax on it. And they can sell that debt for someone else to collect.
You have already tanked your credit by filing and the 30K is not going to get you out of debt completely.
It depends on what you want.

[Flamingo]

You will need to thoroughly discuss this with your attorney. You have already filed so you will have a Chapter 7 on your credit reports for 10 years. You will still have debt, although not large, if you use the inheritance to pay off your bills. It may be cheaper in the long run to negotiate with your creditors and see if they will forgive a portion of the debt and then you will have to pay taxes on the forgiven portion in the year in which forgiven on your tax returns which may work for you. You will have to do some number crunching and see if that is possible. You may not now be able to file for Chapter 7. Best of luck to you and my condolences to you and your family on your loss.

[pigpen75]

If I can some how get the insurance check put in my brothers name and sent to him is that legal. The way I see it, If the Bankruptcy is going be on my record for 10 years than I should atleast get to keep the money my dad left me???

[TEW]

If I can some how get the insurance check put in my brothers name and sent to him is that legal. The way I see it, If the Bankruptcy is going be on my record for 10 years than I should atleast get to keep the money???

That's called Fraud
good luck

[AngelinaCatHub]

If I can some how get the insurance check put in my brothers name and sent to him is that legal. The way I see it, If the Bankruptcy is going be on my record for 10 years than I should atleast get to keep the money my dad left me???

TEW is right about your question. You however are not obligated to accept an inheritance. You may deny it from his estate. Now saying that, under your circumstance this could also be construed as fraud as you knew about it and obligated yourself to the 7.

I like one poster's thought of attempting to settle for 50%. The fact that you did file 7, your credit is dinged anyway. 'Hub

[Mi Bankruptcy]

Think carefully before attempting any workaround. You don't want to make a bad situation worse. In other words. How would you feel if the police showed up at your door Wednesday to take you away for fraud or attempted fraud. I am also sorry to hear about your father.

[pigpen75]

TEW is right about your question. You however are not obligated to accept an inheritance. You may deny it from his estate. Now saying that, under your circumstance this could also be construed as fraud as you knew about it and obligated yourself to the 7.

I like one poster's thought of attempting to settle for 50%. The fact that you did file 7, your credit is dinged anyway. 'Hub

Ok, so I accept the Inheritance of $30k and begin answering my phone calls from debtors and start taking their offers and paying them back. Should I go to my hearing and explain that I've been paying the debtors and ask for a dismisal or should I just not got to my hearings like the lawyer said and hope it gets dismissed by itself. And I also owe $13k on two cars which I was thinking about paying off with the inheritance and 2 cars for family are exempt so???

[TEW]

JMHO that money is already gone you maybe able to save some of it by continuing your case if you let it get dismissed I don’t see how the 30 K is going to help you other then reduce some of the debt. Have you talking to your attorney about the amount that is exempt. Be very careful paying things off that can become a 2 edge sword.
You need to think carefully about what you are doing I am sure at this time it is very hard.

[jessegirl]

You need to get into a deep discussion with your attorney about the money. Why would you not continue with your 7? Its already on the credit report, so that will be there for 10 years. Do you have a wild card exemption in your state? Aren't you allowed to have some money in the bank? Talk to you attorney about how much the attorney will take. I know it bothers you that its your father money and why should they get wht you dad worked hard for and is going to leave you. I understand the way you feel and it might not be as bad as you are thinking. Your attorney needs to give you all the necessary information on what you can keep and what the trustee will take. As far as transferring it to your brother, that is fraud and yes it will look like fraud. I am sorry for your loss.

[Help!]

I'm sorry to hear about your Dad,
I don't see where letting your case get dismissed is going to be a good thing for you.
If like the other poster said you and you work a deal to pay half they are going to send you a 1099 and you are going to pay tax on it. And they can sell that debt for someone else to collect.
You have already tanked your credit by filing and the 30K is not going to get you out of debt completely.
It depends on what you want.

I second this, and would add one more point to think about. Let's say you don't show at your 341 hearing, your case gets dismissed, you negotiate a 50% payback to your creditors... then get a $30K check in the mail and pocket $15K. As remote as the possibility sounds, the case trustee could learn of this inheritance and believe that you effectively shielded part of that inheritance from liquidation by ducking out of your BK.

If you really don't want to go through with the BK (and I can't imagine why you wouldn't since your credit has already taken the hit), you might consider formally filing a motion to dismiss, explaining the circumstances at the hearing and protecting yourself from any perception that you were hiding anything.

My opinion is that case trustees tend to hone in on anything that looks interesting, especially assets, and that it is better to openly communicate than to strategize.

[pigpen75]

I second this, and would add one more point to think about. Let's say you don't show at your 341 hearing, your case gets dismissed, you negotiate a 50% payback to your creditors... then get a $30K check in the mail and pocket $15K. As remote as the possibility sounds, the case trustee could learn of this inheritance and believe that you effectively shielded part of that inheritance from liquidation by ducking out of your BK.

If you really don't want to go through with the BK (and I can't imagine why you wouldn't since your credit has already taken the hit), you might consider formally filing a motion to dismiss, explaining the circumstances at the hearing and protecting yourself from any perception that you were hiding anything.

My opinion is that case trustees tend to hone in on anything that looks interesting, especially assets, and that it is better to openly communicate than to strategize.

One more option. What if I just paid off my 2 cars and put the rest toward my student loans before any of my hearings?

[Help!]

One more option. What if I just paid off my 2 cars and put the rest toward my student loans before any of my hearings?

Not a good idea IMHO. The trustee could then take the cars and go after the money paid on the student loans as preferential payments. Be careful.

[GreenInkOnPaper]

If -- and this is only IF - you go the settlement route, here's what I would do:

YOU decide what amount you are willing to pay. Offer it with the condition that no 1099(?) is sent to you or the IRS. In this day and age, it may work.