End in sight - but something has come up

[Alex46]

Hi everyone!
So, the light at the end of the tunnel is finally in view (faintly). We have our discharge and are just waiting on the final closing. A lot has happened in the past 5 years. We, first, got a new attorney. Our initial attorney was obviously a "bankruptcy-mill" who never answered questions and never explained things to us. Our new attorney was great every step of the way. With the housing market as hot as ours was/is we were even able to sell our small home and purchase a new home so that we could bring my mother to live with us (and save on the cost of her rent and living expenses).

So, I was more or less just waiting on things to finalize. But, it appears we have a new monkey wrench. My step-father is a business owner, and also owns a few different real estate investment properties. Over the last decade, my husband has been helping out by performing various odd jobs. Everything from mowing the lawns at some of the properties, to maintenance at some of the business', more or less, if my step-father called and asked, my husband would do it (my husband is retired and on VA disability). My step-father would usually reimburse him for the gas costs, buy him lunch, little things like that. My husband never had an issue with it, since my step-father is elderly (in his 80's). A few weeks ago, his secretary called me and asked for our new home address. I figured it was so that my father would have it, and who knows, maybe to send a card during the holidays.

Well, I was wrong. We received a cashier's check in the mail for a sizable amount. According to my step-father, he evidently sold one of his rental properties, and wanted to give us a gift to show his appreciation for all the support and help we'd given him over the past decade. The amount, to us, is sizable (especially in light of the past 5 years of lean times). It's not lottery-level winnings or an amount that would pay off our entire Chapter 13. But definitely enough to help us acquire a car (the transmission on our car died and we couldn't afford a new one). Right now, we are driving a mini van a friend lent us that the speedometer doesn't work. We'd been holding out until the discharge to get a used car. We also have 15k in medical debt that we are paying on from an emergency room visit of mine (I have epilepsy and had a bad seizure that landed me in the hospital).

So, long story short, I'm at a loss. I haven't contacted my attorney yet. With the 13 discharged, do these funds have to go to the trustee if they are a gift and not an inheritance. I searched the forums and saw a lot of discussion around the 180 day rule (I'm in Michigan), but is it splitting hairs if it is a gift versus an inheritance? All of our secured creditors were paid, and the remaining debts were smaller debts that were sold to junk debt buyers (save for my student loans). So, if the money has to go to the case, I'm also inclined to give the money back and say thanks for the thought, but no thanks.

Any advice would be greatly appreciated!

[justbroke]

My personal thoughts are that this is not an inheritance since there was no death (thank God). This appears to be a gift and it was received after your applicable commitment payment period has elapsed and the discharge has been entered. I think the underlined portion is the kicker.

Please contact your Chapter 13 attorney and confirm.

The 180 day rule only applies to "gifts" by (1) bequest, devise, or inheritance; (2) as a result of a property settlement agreement with the debtor’s spouse, or of an interlocutory or final divorce decree; OR (3) as a beneficiary of a life insurance policy or of a death benefit plan. The first item is related to death only (bequest, devise or inheritance) and what you write is not due to an unfortunate passing of an individual. Likewise the third item is also related to death. Since you were not married to the step father and there is no property settlement agreement, then it doesn't fit the second item's definition either.

At least those are my thoughts. A strict reading of the bankruptcy rules may be more strict than I have written. The rules may include any gift received while the case is active (not closed). So, this really needs to be answered by the attorney.

[Alex46]

My personal thoughts are that this is not an inheritance since there was no death (thank God). This appears to be a gift and it was received after your applicable commitment payment period has elapsed and the discharge has been entered. I think the underlined portion is the kicker.

Please contact your Chapter 13 attorney and confirm.

The 180 day rule only applies to "gifts" by (1) bequest, devise, or inheritance; (2) as a result of a property settlement agreement with the debtor’s spouse, or of an interlocutory or final divorce decree; OR (3) as a beneficiary of a life insurance policy or of a death benefit plan. The first item is related to death only (bequest, devise or inheritance) and what you write is not due to an unfortunate passing of an individual. Likewise the third item is also related to death. Since you were not married to the step father and there is no property settlement agreement, then it doesn't fit the second item's definition either.

At least those are my thoughts. A strict reading of the bankruptcy rules may be more strict than I have written. The rules may include any gift received while the case is active (not closed). So, this really needs to be answered by the attorney.

Thank you for your interpretation! That was kind of what I was thinking. I do plan to contact my attorney, but figured I'd first get the takes on here (just so I don't run up the bill on my attorney). Everything I've seen seems to be specific to death and/or agreements (like property or divorce) like you said.

But thank you for the thoughts. And yes, I am very glad it isn't an inheritance. Last year was tough enough already, because my husband lost both his mother and his uncle (and was unable to be with either one on their last days in the hospital). So, I don't think I could handle one more passing.