Getting sum of money before discharge

[tobee43]

or keep your mouth closed: this is not an enormous amount, if it were to say be over 10k i would consider. the reason i feel strongly about this is we rec'd over 10k during our "WAITING" period of 60 days and told to pend it ASAP by our atty. it was a tax return, same concept.

we never had a problem with it and that was a fairly large sum. it was explain very clearly that if asked by anyone you already spent the money. (attys advise). again, i would say nothing. if it makes anyone feel better wait the 61 days to deposit it.

[justbroke]

I understand what you are saying tobee, but waiting until discharge does not change the "nature" of this asset (money). The least I would personally do, is inform my attorney and seek guidance. If the attorney says to ignore it, then you have been given legal advice from someone that practices in your area (and, matter of fact, is licensed to practice law).

The bottom line is that you should seek advice from a bankruptcy attorney for late discovered assets.

[AngelinaCat]

I would understand if this were a few hundred dollars, say $600.00 or so. Even up to 1K.

But amounts starting with a '3', and having four digits behind it, is NOT small in my book. The OP needs to contact the attorney's office....

Sorry tobee43...

ETA: What you were allowed in Middle District Florida, is NOT necessarily what the OP filing in Maryland will be able to claim....

[brokehmowner]

Thanks for all the advice. I was able to speak with an atty who's name his paralegal gave me. I explained the situation. It does not need to be reported. As precaution, I will wait until I see that discharge. 341 was Oct 2nd so discharge should be today.

[justbroke]

All I can say is... awesome! Nice early Christmas present.

[brokehmowner]

All I can say is... awesome! Nice early Christmas present.

Nice Christmas present indeed, and part 2 of the present is notice that my 2nd mortgage is being extinguished! So glad I didn't struggle with chapter 13, because the 2nd mortgage would have been the only reason to do it. I figured we would just stay and pay the 1st, until there was equity and the 2nd decided to foreclose. That's not hanging over our head now!

[LadyInTheRed]

Glad to read the news!

Nice Christmas present indeed, and part 2 of the present is notice that my 2nd mortgage is being extinguished! So glad I didn't struggle with chapter 13, because the 2nd mortgage would have been the only reason to do it. I figured we would just stay and pay the 1st, until there was equity and the 2nd decided to foreclose. That's not hanging over our head now!

What do you mean it's being extinquished? Who is the notice from? Are you sure the lien won't remain? Did you get an order declaring the loan unsecured? (very rare for a loan secured by a personal residence in a Chap 7). Make sure you understand whatever the notice you received means.

[tobee43]

Thanks for all the advice. I was able to speak with an atty who's name his paralegal gave me. I explained the situation. It does not need to be reported. As precaution, I will wait until I see that discharge. 341 was Oct 2nd so discharge should be today.

jb and angelinacat, ok!! it's not so much the district or state in a 7. i'm glad the OP contacted their atty to make certain. as it does not need to be reported because it's after the snapshot and during the waiting period. the only reason i was basically certain about what i said it happened to us on a small scale and our atty said spend it and enjoy it. so my information really came from direct experience as opposed to "law". for all we know each atty may have their own view on this.

[LadyInTheRed]

jb and angelinacat, ok!! it's not so much the district or state in a 7. i'm glad the OP contacted their atty to make certain. as it does not need to be reported because it's after the snapshot and during the waiting period. the only reason i was basically certain about what i said it happened to us on a small scale and our atty said spend it and enjoy it. so my information really came from direct experience as opposed to "law". for all we know each atty may have their own view on this.

Yes, another more conserative attorney very well may give different advice. The fact is that the OP was entitled to this amount on the day he filed. Whether or not he knew it on that day is not relevant to anything except maybe weather leaving it off the original petition was a fraudulent act.

As JB explained, this is an after discovered asset that a trustee could discover later and collect for the unsecured creditors. The law on the issue is clear and JB summarizes it well. How the OP or anyone else in a similar situation should act given the law and the specific facts of each case, is a matter of legal opinion that anyone in this situation should receive from his own bankruptcy attorney. It's worth repeating JB's excellent summary of the applicable law for anyone in a similar situation who comes across this thread:

I'm sorry, but here is some more poo.

I know that this is the worse scenario that people want to happen. That is, file bankruptcy, and then, just before the bankruptcy is discharged/closed (not that it really matters), some "old" but unexpected money comes through. The "unexpected" money could be from a relative that owed you thousands from years ago, or some back pay that your job owed you. The key is whether it was an obligation that was due you prior to filing.

The term for this is a late discovered asset. These are assets that would have been a part of the Estate on the day of filing. These types of assets, of the late discovered variety, can be recovered even years later by the Trustee, so long as the Trustee acts within 1 year of knowledge of this asset type. In other words, late discovered assets are always recoverable on behalf of the Estate.. even years after close. (An unpaid debt is an asset of the bankruptcy estate if the right to payment was prior to filing!)

The best advice has already been given. Seek counsel from your attorney and then follow their directions. This may or may not include amending your Petition and exempting the funds.

[justbroke]

I typically forgive all persons indebted to me every Christmas. Of course, the borrowers are on my "do not lend' list after that, but no one ever owes me anything after Christmas in any given year.

And the answer is no, I'm not lending at this time!

[brokehmowner]

2nd mortgage extinguishment is part of the 2MP program. I wouldn't have believed it myself if I hadn't seen several people on a mortgage forum I'm on report that they were getting them starting around August of last year. At that point we were all hopeful of getting one but there didn't seem to be a rhyme or reason for it. I really thought they weren't doing them anymore so I was TOTALLY SHOCKED. Even though I was aware of the program I just kept asking the rep on the phone is full extinguishment, as in I don't owe it, as in if I sell it I don' t have to pay it off, blah blah blah. He was really nice about it and finally took me to the website site where it is described in full (makinghomesaffordable.gov). I only had to sign a Dodd Frank stating I own the house and live in it. I will receive the release in 30 days.

It's not charity though. Treasury gives the servicer a lump sum for offering partial and full extinguishments.

Glad to read the news!



What do you mean it's being extinquished? Who is the notice from? Are you sure the lien won't remain? Did you get an order declaring the loan unsecured? (very rare for a loan secured by a personal residence in a Chap 7). Make sure you understand whatever the notice you received means.

[brokehmowner]

Yes, another more conserative attorney very well may give different advice. The fact is that the OP was entitled to this amount on the day he filed. Whether or not he knew it on that day is not relevant to anything except maybe weather leaving it off the original petition was a fraudulent act.

As JB explained, this is an after discovered asset that a trustee could discover later and collect for the unsecured creditors. The law on the issue is clear and JB summarizes it well. How the OP or anyone else in a similar situation should act given the law and the specific facts of each case, is a matter of legal opinion that anyone in this situation should receive from his own bankruptcy attorney. It's worth repeating JB's excellent summary of the applicable law for anyone in a similar situation who comes across this thread:

Lady in Red,

Are you saying the attorney was wrong? I really don't have a problem at all with reporting the money. I am quite sure it will be exempt, and I am even more sure that if they take it I don't care. I've been discharged, wasn't expecting the money, freed of my 2nd mortgage. But I don't know what I should do if the attorney says spend and enjoy! My attorney will be taking calls next week so I will ask him also.

[LadyInTheRed]

Lady in Red,

Are you saying the attorney was wrong? I really don't have a problem at all with reporting the money. I am quite sure it will be exempt, and I am even more sure that if they take it I don't care. I've been discharged, wasn't expecting the money, freed of my 2nd mortgage. But I don't know what I should do if the attorney says spend and enjoy! My attorney will be taking calls next week so I will ask him also.

I am not saying your attorney is wrong. Just that each situation is different even when they seem similar. I don't want others to apply the advice you received to their own situation without consulting their own attorney. Even when the law is clear, how to apply the law to a particular situation is not always so clear. Reasonable attorney's may give different advice. It won't hurt to talk to your attorney about this when he's available.

[tobee43]

OP your atty is not wrong, listen to him/her they handle your case and will tell you what you should notify the court on and what not to report to them.

oh, lady, i don't know about that i think it's useful to many about what other's experience with their own personal attys and bks. jb and i are both in florida and while some districts may be hardnosed on this particular issue, ours was apparently not. i do NOT feel our atty would in anyway jeopardize their clients or our personal position unless they were quite certain on the way the court views this subject matter.

to the OP i would stick with what your atty has advised you. NOT that they are always right, but most know their districts views on such situation. if you hired this atty because you faith and trust in them, i would go with what they advise.

of course with all due respect to lady and jb.