Canging situations: Thread 3

[dtimo]

I am planning to file Ch. 7 next week.

I will keep my secured debt of a mortgage and a line of credit secured against the house.

When my father dies I will receive some money. If this happens within 6 months, do I have to pay the unsecured creditors first or can I pay the line of credit?

[despritfreya]

Should your father pass within 180 days of the filing date (sure hope he lives a long time), you must contact the Trustee. Any inheritance you become entitled to will belong to the Trustee subject to any exemption you may be able to claim. Check with your attorney.

[tcreegan]

Hi dtimo,

Just curious, does the house enough equity to cover the 2nd? If it doesn't, you can probably settle the 2nd for pennies on the dollar.

Good luck w/ your filing,

Tom in Colo

[AngelinaCatHub]

I am planning to file Ch. 7 next week.

I will keep my secured debt of a mortgage and a line of credit secured against the house.

When my father dies I will receive some money. If this happens within 6 months, do I have to pay the unsecured creditors first or can I pay the line of credit?

You have no choice in what gets paid. Once you file, you have to list and will be asked if you have potential future income in forms of inheritance mainly. If so, you will be scrutinized and if you ask your lawyer, take his advice but by NO means, attempt to hide this fact. If your bk goes past some time, it will be forgotten, if you are pinned with fraud, it could be overturned as well as confiscated for any and all creditors. 'Hub

[JSchrader]

In a Chapter 7 case, the secured creditor will typically not be paid through by the estate, and will retain its lien after the bankruptcy.