windfall question: chapter 7

[Fredhart]

I plan on filing ch 7 fairly soon. My old company (I'm just an employee, not owner) is in an arbitration with a former client. If they (we) win I stand to gain a considerable sum (100-200K in cash and around 1million+ in fairly illiquid stock). In all likelihood, this won't occur for years (considering the likely appeals process) but theoretically it could happen in months. This case has been going on for 5 years now, beginning with an original arbitration followed by an appeal followed by another arbitration.

1. Am I required to disclosure this?
2. Its possible I get the windfall sometime after I file or am discharged. Is it protected because its not an inheritance, settlement, etc?

[Chowder]

If you are listed in the court docs, you may be expected to include it.

Got an Attorney?

[liz417]

At the 341, the Trustee does ask you if you are expecting an inheritence or a settlement? Hmmm, I would speak to an attorney ASAP.

[Fredhart]

thanks for the replies. its certainly something i have to ask an attorney.

i'm not a party to the lawsuit, technically, but i stand to gain if one party (the plaintiff) wins. as far as being listed on the court docs, i'm listed as a witness.

we don't expect a settlement. If i get money, it'll be a straight award (awarded to my former employer, then piad to me).

[OhioFiler]

There must be some documentation between you and your former employer spelling out your portion of any judgement. I'd get those documents to an attorney pronto.

[AngelinaCatHub]

Of course I'm not going to state you should not consult your attorney, but, let's be reasonable. This is not really your business. It is outside of your realm and is a gamble "on the come", and may not materialize at all. If it were me, I would say nothing at all about it as this is merely speculation on your part and not guaranteed in anyway. It is like me saying to my Trustee, "well I could win the lottery" when he asked me any question about possible income. That would be a true statement but far fetch as your speculation is.

It would also stall your bk for a very long time, possibly not discharging you at all until this "thing" is over. If for some reason you are discharged and DO get a windfall, the Trustee can reopen your case, but then, you could afford to pay everyone back anyway. So there is no damages if you state nothing and it would not be fraudulent to state nothing about something that may or may not happen.

That is MY opinion. 'Hub

[SocalBroke]

I gotta agree with Hub on this one, I think the question is whether or not you expect any inheritance or settlement and honestly, at this point, I could honestly answer no if I was you because I would far from EXPECT it at this point and even if it does happen, it is your company getting the settlement, not you. It sounds more like you might receive a 'bonus' of some sort. ;)

[Fredhart]

thanks everyone. A quick question on the role of the trustee. does the trustee continue to get copies of my bank statements for the months following the filing, or only the 6 months prior?

In other words, is it the trustees responsibility to monitor your accounts (in order to see how much money goes in there and watch for a windfall) and if so, for how many months after filing does this go on?

[liz417]

thanks everyone. A quick question on the role of the trustee. Once I'm assigned a trustee do they get copies of my bank statements months following the filing of the bankruptcy, or only the 6 months prior?

In other words are they monitoring your accounts to see how much money goes in there, and if so, for how many months after filing does this go on?

Although I had to turn in 6 months of bank statements to my attorney, that was for him to look over my numbers. He told me that he sends the Trustee 2 months of statements. So, no that Trustee doesn't look at the statements line by line (unless s/he suspects fraud or any "big" withdraws/deposits).

[Fredhart]

Although I had to turn in 6 months of bank statements to my attorney, that was for him to look over my numbers. He told me that he sends the Trustee 2 months of statements. So, no that Trustee doesn't look at the statements line by line (unless s/he suspects fraud or any "big" withdraws/deposits).

Thanks liz, but just to clarify...when you say say you turned over 6 months worth of bank statemsts and your attorney supplied the trustee with 2 months worth of that, I assume that means you supplied the 6 (or 2) months of statements prior to filing, as opposed to going forward. correct?

[OhioFiler]

Thanks liz, but just to clarify...when you say say you turned over 6 months worth of bank statemsts and your attorney supplied the trustee with 2 months worth of that, I assume that means you supplied the 6 (or 2) months of statements prior to filing, as opposed to going forward. correct?

It's quite difficult to provide copies of future bank statements!

[liz417]

Thanks liz, but just to clarify...when you say say you turned over 6 months worth of bank statemsts and your attorney supplied the trustee with 2 months worth of that, I assume that means you supplied the 6 (or 2) months of statements prior to filing, as opposed to going forward. correct?

Yes, that is correct. My attorney sent the most recent of the 6 months before I filed.

[music12]

and then there was my attorney, who didn't ask for any bank statements whatsoever. neither did the trustee. i suppose they just trusted me.