Chapter 13 into a 7, with home sale assets

[hatcherdogg]

So here is the sitch. My mom was in a repayment agreement on a 13, which included a mortgage payment. She sold the house, and walked with around $20k. She is now converting to a Chapter 7. In the 7, all cash will be liquidated.

What are the ramifications if she gives away the money to either charity or an induvidual person?

What does she have to document?

Isn't a 7 complete protection from Creditors, regardless of equity?

Please help soon- she is closely watching the deadline.

Thanks!

[StaciMM]

7 is protection from creditors, but equity & other assets are subject to your state's exemption levels.

Giving away the money is usually considered a preferential payment-the trustee can take it back to distribute among the creditors. (And take a cut.)

How long is left in the chapter 13?