House inheritance and Chapter 13

[brit929]

Hello,
my father passed earlier this year and left a house worth about $100,000 and a mortgage of $7000 remaining. He had no other assets or life insurance or money. My brother and I want to sell the house. I just passed my 36 month of my chapter 13 and my base plan is $54000 and I have paid $32000 so far with payments of $900 a month. I have spoken to so many different attorneys trying to sort out my Dads estate so I am confused as to how this affects my bankruptcy. I called my bankruptcy attorney to let him know I inherited a house along with my brother. He wants the paperwork from the house along with the value then he will discuss what needs to be done.The house was seller financed and the gentleman is sending the paperwork. The seller has been very easy to work with. Anyway sorry this is so long but I want to know if I can use the proceeds from the sale of the house to pay off my bankruptcy? I have read about the 100 % claim payoff and have looked at the NDC website but can’t figure it out.I assume it wouldn’t be as easy to end the bankruptcy early by paying the remainder left on my base plan. If I can’t end it early will the trustee take my portion of the proceeds of the house AND increase my payments? When I started the bankruptcy I had a lot of overtime and mileage and was honest with the trustee but since COVID hit I don’t have overtime or the extra mileage checks do $900 is a lot. Thank you in advance for any suggestions

[justbroke]

First, I'm sorry to read about the loss of your father this year. It has certainly been a very trying year for many.

Second, Welcome to BKForum!

Now, to answer your questions. It is likely that the Trustee would want your portion of the proceeds of the sale up to the amount that would include 100%. There may be a strange situation if you were under-the-median and filed a plan more than 36 months (then your base "could" be the total expected to be paid). Figuring out what is 100% can be difficult looking at the NDC and the Trustee would have the actual payoff figure.

So yes, the Trustee would take your portion of the proceeds. However, the Trustee would not increase the payment amount (there is no reason to because your income hasn't increased). The Trustee, however, has to deal with the impact of the taxes on your inheritance (unless this is included under the lifetime exemption for your father's estate). I'm not a tax expert and certainly not trying to give tax advice, but just be aware of those things. Your father's estate attorney and/or the probate estate may actually pay any tax realized before giving you your portion anyhow.


Your bankruptcy attorney will talk with your father's the probate/estate attorney(s) after looking over the paperwork. Your bankruptcy attorney will figure out what to propose to the Trustee (all the proceeds or some portion of the proceeds) whether that's paying it off or just surrendering some portion of the proceeds.

[brit929]

Thank you so much for the info...it helps a lot also thank you for the welcome...I can’t believe I am just now finding this site!