Ch. 7 & Dad's Life Insurance

[pigpen75]

I just talked to my lawyer again and he told me that the trustee will take the entire $26,000 and will probably go after the $8,000 that was paid for the funeral expenses. That's ****ED UP. I also found out that those bastards get like 20% commision on our assets. I don't care about my share but to take money from the funeral home is just wrong. So I was thinking about not going to the 341 meeting and hoping it gets dismissed and then taking the creditors deals and paying them off. I may just have a little left over to put on my cars?

[coloradomrg]

First thought: BK is not a means to wipe out debt and keep an inheritance.

More thoughtful:
If you can settle all of your debt, do that. I wouldn't want the idea of defrauding anyone (even creditors) on my mind everytime I thought of my Dad. Beyond the legal implications, it's about what kind of person you are, and that your Dad raised you to be. Of course, this is assuming that your concious is a result of being a good person and being confused. If your ok with the fraud idea then I'm wasting my time... (I doubt thats the case)

If you can not settle all of your debt for the inheritance amount, you would be better off going through with the BK. It's already on your credit report, that part is not going away. If the trustee takes the inheritance and distributes it among the creditors, then discharges the rest you come out of the situation debt free without a heavy heart. That sounds like a good result to me.

I wish we had used an inheritance my wife recieved to pay off debt a few years ago... instead we used it to make things worse

[Help!]

Pigpen, from the moment you file, your debts and assets (including the inheritance) are under the control of the trustee. It is not your decision what to do with the inheritance at this point as it legally belongs to the bankruptcy estate. F'd up or not, that's how it works.

[JJL]

First, sorry for your loss

Hey just enjoy the fresh start. Its probably to late to stop it anyways...and you do owe the money.

[GreenInkOnPaper]

The trustee CANNOT take money from the Funeral home. That money was to paid for an expense of your DAD'S ESTATE, not on YOUR behalf.

[TEW]

The trustee CANNOT take money from the Funeral home. That money was to paid for an expense of your DAD'S ESTATE, not on YOUR behalf.

NO? I am wondering about the house and the rest of the inheritance pigpen talks about in his other posts

[pigpen75]

The trustee CANNOT take money from the Funeral home. That money was to paid for an expense of your DAD'S ESTATE, not on YOUR behalf.

I wonder if the Funeral Expenses would be Exempt? Does anyone know this for sure?

[Flamingo]

I wonder if the Funeral Expenses would be Exempt? Does anyone know this for sure?

If the father had a will, the will should indicate that all bills be paid by the Executor from his Estate and that would include the funeral home if there was a life insurance policy he had in place upon his death, etc., or other funds from his Estate (savings accounts, etc.) which could cover that expense. The funeral home director usually goes over all this with the family when they first come in.

[pigpen75]

If the father had a will, the will should indicate that all bills be paid by the Executor from his Estate and that would include the funeral home if there was a life insurance policy he had in place upon his death, etc., or other funds from his Estate (savings accounts, etc.) which could cover that expense. The funeral home director usually goes over all this with the family when they first come in.

He had no will that I am aware of.

[yellowstone]

A life insurance policy of the father with son as beneficiary is not an estate asset.

You may still be able to execute a disclaimer, but whether you have the power to do that while bankrupt is a question of state law, and the answer varies A LOT depending on what state you live in. I think your attorney's advice to skip the 341 and get a dismissal might let you execute the disclaimer while not bankrupt, so your brother and the funeral home get the money, not your other creditors. Note that YOU PERSONALLY GET NONE OF THE MONEY IF YOU DISCLAIM. NO wink wink deals allowed, that is fraud. But this is really a question your attorney needs to advise you on.

[Flamingo]

A life insurance policy of the father with son as beneficiary is not an estate asset.

You may still be able to execute a disclaimer, but whether you have the power to do that while bankrupt is a question of state law, and the answer varies A LOT depending on what state you live in. I think your attorney's advice to skip the 341 and get a dismissal might let you execute the disclaimer while not bankrupt, so your brother and the funeral home get the money, not your other creditors. Note that YOU PERSONALLY GET NONE OF THE MONEY IF YOU DISCLAIM. NO wink wink deals allowed, that is fraud. But this is really a question your attorney needs to advise you on.

Most folks have burial funds preplanned and held on the side to take care of their burial but of course many do not (i.e. prelanning CD in place for that purpose). If the Estate has no funds available to pay the funeral home or burial expenses, i.e. after sale of property or house, the spouse/children usually pay for the funeral and if they receive life insurance funds from the deceased, utilizing part of those funds for that purpose...happens all the time. However, if one is in Chapter 13 during this time and receives any life insurance funds, it's easy to see the issue. That is why some folks ensure they get off of parents' wills or have beneficiaries changed on life insurance policies prior to filing if they think a loved one might die during their Plan in which they could receive an inheritance or life insurance. In the OP's situation it's too late for that but I am wondering why the burial costs were not paid from the deceased Estate...but I don't know the entire situation and I see one poster indicated there is no will so I am assuming no funds were available and relatives were responsible for payment.

[pigpen75]

So say they take the money from the Funeral home. My 341 is on Monday. Can we add the funeral home as a debt, or will they come after me for the money or what???