Inheritance Headache

[Anastasia]

Hi everyone. I found this great forum and need your help desperately. Here's my situation: My father died 4 months ago and his will simply stated that my brother and I were to share anything left over after all debts were paid. We put his house up for sale to pay off the mortgage and other bills. I found out the day before closing that since I was in Chapter 13, I had to get permission from the court to even sell the house. (I'm in NC and have been in Chapter 13 for 2 years now.) The deed is not in my name at all, but since I "inherited" it, it doesn't matter. The sale is being held up now until a few matters can be worked out. Here is where my questions begin. I sincerely appreciate your help. My BK attorney is not being much help.

1. I pretty much know that any money I receive will have to go to the trustee. But my dad also had a car and I put it in my name for insurance purposes. It is still half my brothers. If I only owe $18,000 in my Chapter 13, the money I would get and the car would be far more than that. Aren't they only supposed to take enough to pay off my balance? The car is very sentimental to me and I don't want to lose it. The money itself would be enough to pay my balance.

2. At closing, the are requiring me to pay off a judgment that is against me. Can my judgment attach to an inherited house? And does it have to be paid off if it is in my Chapter 13? The closing attorney is going to send a check for the full amount to the local clerk of court. I would think it would need to go to the trustee.

3. My husband was laid off 2 months ago. Would the trustee take this into consideration to let us keep our inheritance? But then again, it would probably be more beneficial to use it to pay off the Chapter 13.

4. Am I right in assuming that when the trustee takes my inheritance and it's adequte to pay off my balance, my Chapter 13 will be discharged?


This has turned out to be more trouble than I ever expected. My brother is ready to wring my neck because I'm holding him up from getting his money. You live and learn.

[coma]

What percentage are you paying back under your ch 13?

[Anastasia]

According to my plan information, secured is 100% and unsecured is 9.72%

[start-n-over]

Anastaia, the same thing recently happened to us. Our lawyer told us that any extra money paid to the trustee goes to your creditors. The balance of your plan is not the true balance. The total of all your debts prior to your plan is your balance.
From what we were told you can't pay off unless the money is equal to ALL the money you owe.

[SinkingFast]

Anastasia is an Old Law filer. Different rules for Old Law filers than now.

Once Old Law filers hit the 36 month mark, they could "buy-out" of their plans at the $$$ amount set by the Trustee at the time of filing BK. Some Old Law filers bought out even earlier than the 36 month mark. That may be the case for you, Anastasia.

You really need to call and ask your attny.

[Anastasia]

Yeah, I found out about the balance not being the true payoff. You get penalized if you want to pay off early. They would increase my base. My attorney has been searching for the best way for me to go and has decided that I should convert to a Chapter 7. He says I should be able to protect my inheritance (which I have not received yet) and my dad's car that I have. Of course, I'll have to put off the sale of my dad's house for awhile and lose the buyer I have now. I hate that. If I were to go ahead and leave everything like it is and sale the house, my attorney said he could probably protect around $5000 of my inheritance but not the car.

I still don't know the answer to the part about my judgment attaching to my dad's house. That shouldn't happen. The house is not in my name whatsoever. The will specifically says my brother and I are to share anything left over after the sale of assets and all bills are paid off. The house wasn't left to me....it was left to be sold and pay off bills. Anything after that is to be split. It's all confusing. They say they have never seen a case like mine in this jurisdiction.

[aa06a47]

I am very sorry to hear that your father passed away. The bankruptcy laws are not good to the debtors in bk concerning matters of inheritance especially in low % paybacks to unsecured creditors.

Good luck and keep us up to date on what happens.

[aa06a47]

Yeah, I found out about the balance not being the true payoff. You get penalized if you want to pay off early. They would increase my base. My attorney has been searching for the best way for me to go and has decided that I should convert to a Chapter 7. He says I should be able to protect my inheritance (which I have not received yet) and my dad's car that I have. Of course, I'll have to put off the sale of my dad's house for awhile and lose the buyer I have now. I hate that. If I were to go ahead and leave everything like it is and sale the house, my attorney said he could probably protect around $5000 of my inheritance but not the car.

I still don't know the answer to the part about my judgment attaching to my dad's house. That shouldn't happen. The house is not in my name whatsoever. The will specifically says my brother and I are to share anything left over after the sale of assets and all bills are paid off. The house wasn't left to me....it was left to be sold and pay off bills. Anything after that is to be split. It's all confusing. They say they have never seen a case like mine in this jurisdiction.

This advice may be a little under the table here, but if you can trust your brother.....

Since your father didn't specify any specific amounts to each of you, this is what I would do...... Figure out how much debt your father owed and sell the property to your brother for the exact amount owed to clear up your fathers estate bills. Then the distribution would be Zero to both your and your brother. There would be no assets for the trustee to get.

Have your brother then sell the house and put the money in a spend thrift trust with your name on it...trustee can't touch it.

Again, this practice might be looked on as "wrong", but it should protect your inheritance.