Inheriting money, how long to wait to file

[Goodgrief]

Please Help:


I am inheriting $25000 next month. I would have a no asset case. I am unemployed currently and this money will be a God sent to me and my family. We will be able to catch up on our mortgage and not have to go through foreclosure.

I don't want the trustee to take it, so How long do/should I wait until I file BK?. How do they know how much you get? I live in ohio if that is an issue. The 25k isn't even close to paying off my debt and my house or I wouldn't even file BK. The job market and this economy is killing me.

[HHM]

It's not a question of waiting, its a question of spending.

To spend down that amount of money "properly" (meaning spending it in an acceptable way so the trustee doesn't object) will require a lawyer. So, use part of the money to pay a lawyer to help you. When it comes ot cash, unless your state has an exemption (most don't), you need to spend the money before filing BK.

[Goodgrief]

Yeah, I plan on asking one next week. A couple of questions

1.) in the bk paper work does it ask you if you have received $ within a certain period of time? if so, what is the period they look back.
2.) Not being dishonest, but if I endorse the check over to my parents, as my bank account has been closed. Will this raise any objections?

I do owe my parents money I borrowed to get us through these rough times and would love to pay them back the 10k. I don't want any objections for paying them directly out of my account either.

[queenfluff]

There are sections on the paperwork about Inheritances I think.

I think the timeline was 6 months prior to file - they look at your income - not sure but inheritance is probably counted as income.

Yes, if you put the money in your bank account and write a 25,000 check out to someone I am pretty sure it will stick out. They are going to want to know where that money came from and what you did with it. Plus I read a story that some gave money to their grandma before they filed BK and the trustee went after grandma for the money so they can try to get that money from your parents.

There was another thread that kind of covered that about giving money to relatives before you file - I forget where I saw it though.

[keepmine]

Since you haven't filed yet, this money is an asset and could be part of the bk estate unless you spend it down or can exempt it.
Whatever you do, don't pay your parents or other insider. If you file within a year, that's a preference/insider issue and the trustee will sue them for the return of the money. Post bk, you can repay anyone you please.
I think the best advice you'll get from your lawyer is, delay filing as long as possible.

[queenfluff]

here is the thread I was thinking of:

http://www.bkforum.com/showthread.php?t=37913&highlight=mother

Also, there are many threads about people with inheritances too - might be useful for you to read those. Just do search in the CH. 7 forum for inheritance.

[Goodgrief]

Thanks for your reply,

I dont have a checking account any more, so there wouldn't be a paper trail. I was asking if I endorsed it over to my parents, and had them give me the cash(less 10k I owe them), will that be a problem. Again, I am not trying to lie cheat or steal. I just want to pay my mortgage current,my parents, and keep some emergency money until I find another job, and who knows how long that will take.

Hey if they gave me 100k, this wouldn't be an issue, as I would pay every bill and my mortgage. But it is what it is.

I was really wondering when under oath or on my bk documentscan, I can legally and honestly reply that I haven't gotten any money in the "x" period of time. What is "x" ?

[queenfluff]

Thanks for your reply,

I dont have a checking account any more, so there wouldn't be a paper trail. I was asking if I endorsed it over to my parents, and had them give me the cash(less 10k I owe them), will that be a problem. Again, I am not trying to lie cheat or steal. I just want to pay my mortgage current,my parents, and keep some emergency money until I find another job, and who knows how long that will take.

Hey if they gave me 100k, this wouldn't be an issue, as I would pay every bill and my mortgage. But it is what it is.

I was really wondering when under oath or on my bk documentscan, I can legally and honestly reply that I haven't gotten any money in the "x" period of time. What is "x" ?

Well, yes, you would be lying if you said you didn't get any money in "x" amount of time because you did. I doesn't matter if it came directly from your inheritance or if gave it to your parents and than they gave it back to you in cash. It still sounds like that insider issue. It is like getting a big "cash gift" from a family member to help with your bills. So technically that is what you are doing - having your parents hold your cash to hide it from the trustees. Not really a good idea from what I hear so far.

I am not sure about the endorsing thing but that still looks like you getting money and than giving it to an insider right before doing BK which is really what you are doing. And 25,000 is a lot of money.

Even though it is cash and won't show up on a bank account - you must still be careful. If it were me, I wouldn't do it.

But if they didn't find out about - I would wait until the BK is over for your parents to give you any of the money - and that could take many months before your case is closed. So if you need the money now for mortage or whatever - it is going to be a difficult thing.

But I am still new at all this and I am sure more experienced forums member will know what else to tell you. But I am pretty sure what you are describing will be a problem. (esp, if you file and don't mention the inhertiance and they find out during the process - you could be accused of fraud).

I am sure this is what your lawyer will tell you too.

I know it sucks because you want that money as a fallback - I am unemployed too so I get that - but unfortunatley the cc's don't care about that - they want whatever money you got and that is that.

Let us know what your lawyer says though - I would be interested in knowing the rules on this too.

[Goodgrief]

ok queeny, I don't think you followed . To me "x" s an unkown variable. I am simply asking what is x equal to. 3 months, 6 months, 1 year. As I said I DON'T want to lie(and won't). I need to know what x is so I don't lie.

If the paper work says "have you gotten any money in the last "6" months", then I wouldn't be lieing if I waited 6.5 months. So x would equal 6. (sorry for the algebra lesson). I don't have a bank account, so i can't cash the check. I need my parents to do that.

I will contact a lawyer this week to find out exactly what is legal and not in my area. I was just trying to see if anybody knew for sure, or had a similiar situation.

Again thanks for your help

Keepmine, Thanks for the help, Do I need to have receipts to show where the money went?

[fltoo]

If you pay your parents now, the trustee can take the money from the parents. The lookback for the insider preferential payment is one year where the trustee can avoid the transfer.

You can pay them now, use the 15 thou for living expenses until you find a job. No luxury purchases. You will have to wait 13-14 months before filing.

Or, you can spend down the 25 thou, barring any cash that can be exempted. 6-8 months should spend down the money on living expenses only since you are unemployed and would probably be enough time to wait to file. I would keep all receipts.

If you could wait over the year, it might be a better way go go. It is going to be hard to save the 10 thous to give to parents. Depends on how badly you want to pay them.

Open a checking account and deposit the money. Depositing it into parent's account might raise a red flag. Why chance it?

[CindyLou]

If you do it right and spend the money appropriately, the time frame will not matter. Speak to an attorney.

[Brighterdays]

oops sorry wrong thread

[Goodgrief]

Hey thanks a million, or I mean 25k for all your help

I am just trying to get a time frame together. I am definately consulting with an attorney. As I said earlier, I am an honest indian(no offense to native americans). But the law is the law and as long as I act within it I should be fine.

My parents are my #1 priority(after family). They understand and have been wonderfully supportive. I hated asking them for anything, hence why I really want to give them their money back and have enough to survive. I guess that is the name of the game in this economy(survival).

Did the trustee ask any of you if you had gotten any money in an "x" period of time? (sorry about that darn "x" thing) and if so what was the time period he/she asked?

I mean ch 7 is inevitible in our situation. I just want to make it as painless as possible. The faster we file the fewer calls and other life interupting events can happen. You know like taking a bandaid off. One quick yank is usually the best.

[StartingOver08]

Yes the Trustee asks - the paperwork is very specific on what money you have received from all sources.

As fltoo points out - any payments to an insider (relative, friend, corp partner etc) is considered an insider payment and the Trustee look back period is one year.

If you want to pay back your parents out of these funds - then you will have to wait longer than one year at least to file.

How the Trustee finds out about these things is through a combination of the documentation you provide, plus third party check up on public records. Plus, you are under oath at the 341 and when you sign the petition you are attesting to everything being true and correct. The petition is as detailed as it gets as to what your assets and liabilities are and sources of your income and details of your expenses. They ask everything under the sun - and them some!

So, this is the first step in planning a successful BK.

[fltoo]

[QUOTE=Goodgrief;271088]Hey thanks a million, or I mean 25k for all your help

I am just trying to get a time frame together. I am definately consulting with an attorney. As I said earlier, I am an honest indian(no offense to native americans). But the law is the law and as long as I act within it I should be fine.

My parents are my #1 priority(after family). They understand and have been wonderfully supportive. I hated asking them for anything, hence why I really want to give them their money back and have enough to survive. I guess that is the name of the game in this economy(survival).

Did the trustee ask any of you if you had gotten any money in an "x" period of time? (sorry about that darn "x" thing) and if so what was the time period he/she asked?

I mean ch 7 is inevitible in our situation. I just want to make it as painless as possible. The faster we file the fewer calls and other life interupting events can happen. You know like taking a bandaid off. One quick yank is usually the best.[/QUO
------------------------------------------------------------------------
Don't be afraid of anwering any trustee question as you will have planned your BK and can answer all questions honestly.

Filing fast is not a good thing if all ducks are not in line. One yank of the bandaid is not the way to go in your case. There is no X time frame with spending the money if you decide to file and not pay parents back first.

You need to spend the money down logically on living expenses. It might take 5 months, might take 8 months. You will anwer "yes" if trustee asks you about the money and will provide receipts if they question what you did with the money. There is no fraud involved if you use the money on living expenses. Common sense prevails. You don't want to tell the trustee you spent the money on a large screen TV.

I never found dealing with the creditors a problem. Just tell them you are filing BK and hang up. If they ask you for a lawyer's name, tell them you will call them back when you have that info. Don't let fear of creditor calls push you into filing too early.