Inherit during 13

[Lesa13]

Okay guys, really need some opinions from those of you in the trenches. My attorney is not very helpful.

I have less than one year left in my Chapter 13 plan (old law). My grandmother died in the autumn and I received a disbursement from her trust. The check was cut by a family member who was not aware of the BK and I took it and signed it over to my father immediately, who placed it with his bank.

I have been in touch with my atty. He is not forthcoming about information, how to pay, who to make check or cashier's check out to, except to say if I put this money towards the plan, it will obviously put all the creditors up to 100% and ultimately I will end up paying almost double what I now owe on my current plan.

My grandmother's estate itself is in another state and any tax returns will not include my SSN.

I realize in a perfect world, I would be able to turn this in to the BK court, pay off what I owe and be done - which was what I wanted to do. Instead, since if I turn it in, not only will I lose this money in its entirety (which I can use for necessities like eyeglasses and paying off a utility bill that was not included in the BK and I have been making payments on) AND end up owing MORE than I am scheduled to pay through the plan, it seems like a lose/lose for me.

Since the money is sitting in my father's account and has no connection with me at this point, how big of a risk am I taking by not turning it in? From my atty's correspondence, I kind of get the idea he doesn't want me to turn it in and, in fact, knowing him, he will have forgotten all about me next week since he has thousands of BK clients. Is he obligated to tell the BK court I have it?

Any thoughts, opinions, etc. appreciated. Yes, I know the right thing to do is turn it in. I am well aware of that and I don't need comments about "it's not right to defraud the court". I have attempted to go that route but it seems to me that I am not helping anyone except my creditors (who are getting paid near 100% anyway) by turning this in and I am hurting myself in the process. This BK has been very very difficult for me and I have been living hand to mouth and workign a PT job on the sly just to be able to make ends meet, so this extra $$ would really help me with some necessities i just can't afford on a regular basis.

Thanks -

Lesa in Missouri

[crookedoak]

I am ver much in the same situation.
I am the executor of my grandmothers estate. I am really not close to making any payouts yet but did talk with attorneys office concerning this

What they advised me was to let them know right before making the distribution.

I approx $6,000 more on the plan right now, but they explained that if I received the money that I would have to pay about $15,000.

[Lesa13]

Exactly

I am like, hello, I am almost done...using my atty's figure, I would be at almost 2/3 still owing!

[Flamingo]

I have less than one year left in my Chapter 13 plan (old law). My grandmother died in the autumn and I received a disbursement from her trust. The check was cut by a family member who was not aware of the BK and I took it and signed it over to my father immediately, who placed it with his bank.

Were you aware that you were in your Grandmother's trust? One question we had (Old Law) on our paperwork asked if we expected to receive any inheritances or were involved in any lawsuits which could be settled during a certain period of time. If you were not aware, and when you first learned of the situation, you should have contacted the attorney handling the trust or the executor/executrix and explained your BK situation. Since a check was made payable to you, there is a paper trail with your name and if for some reason the Trustee found out about this, you could end up with a dismissed Chapter 13 and be right back at step one anyway. Only you can decide what you want to do as to this situation as you are the one who has to live with it. It doesn't matter how I or others on here would handle it. I, myself, would follow my attorney's instructions as I was advised right at the outset of our Plan that any inheritances or lottery winnings, etc. had to be reported. Someone else may have just kept their mouth shut and hoped for the best and had the check made out to someone else to hold the money for you. But you did the right thing and contacted your attorney. I would get a definate answer from your attorney as to your situation and follow his instructions.

My grandmother's estate itself is in another state and any tax returns will not include my SSN.

That doesn't mean it is not traceable as you yourself stated there was a check made payable to you and your name is on file with the Register of Wills where her Will is filed which indicates that you are a beneficiary. It doesn't take much to track that down if someone wants to.

I realize in a perfect world, I would be able to turn this in to the BK court, pay off what I owe and be done - which was what I wanted to do. Instead, since if I turn it in, not only will I lose this money in its entirety (which I can use for necessities like eyeglasses and paying off a utility bill that was not included in the BK and I have been making payments on) AND end up owing MORE than I am scheduled to pay through the plan, it seems like a lose/lose for me.
Since the money is sitting in my father's account and has no connection with me at this point, how big of a risk am I taking by not turning it in? From my atty's correspondence, I kind of get the idea he doesn't want me to turn it in and, in fact, knowing him, he will have forgotten all about me next week since he has thousands of BK clients. Is he obligated to tell the BK court I have it?

If you want an honest answer you committed fraud when you signed the check over to your father to avoid receiving the money. Your attorney knows this and may be hesitant now to get involved. So you can live with a free conscience (if this wasn't bothering you you would not have posted it on here), I would contact your attorney and ask him what you should do in this situation since you really only have two choices; let the Trustee know about it or continue to hide it.

Any thoughts, opinions, etc. appreciated. Yes, I know the right thing to do is turn it in. I am well aware of that and I don't need comments about "it's not right to defraud the court". I have attempted to go that route but it seems to me that I am not helping anyone except my creditors (who are getting paid near 100% anyway) by turning this in and I am hurting myself in the process. This BK has been very very difficult for me and I have been living hand to mouth and workign a PT job on the sly just to be able to make ends meet, so this extra $$ would really help me with some necessities i just can't afford on a regular basis.

Totally understand. When my father-in-law passed away in late 2003, we had a similar situation but when the time came to settle his estate and sell his home (my mother-in-law predeceased him), the attorney handling the settlement (the house was left to my brother-in-law and my husband) had to contact our attorney handling our BK because we were in Chapter 13 and there was inheritance money involved. It got complicated but it turned out that we didn't have to turn over any money to the Trustee due to the amount that was left after all bills were paid and fees for selling the house were paid.

Best of luck to you in whatever you decide to do but I would certainly thoroughly discuss this with your attorney.

[Lesa13]

Actually it is not bothering me at all...

I feel both my atty (who is worthless) and the court have sucked me dry finance wise. I was living without heat for two months last year because I could not afford propane. Sure didn't see the BK court stepping in and my atty refuses to EVER file an amended claim, period (this is a quote) unless it is a situation such as someone dies, you have lost your job and can't get a new one for several months, etc.

I have paid faithfully on my plan for over 2.5 years, have never been late or short on a payment.

My question is about what kind of risk I may be taking, but I am NOT feeling guilty. I am paying in my fair share with my creditors and the court. The money that I have inherited is money that would go toward the necessities I still cannot afford such as new eyeglasses, a new computer (for freelance work so I can afford some of those necessities like water and heat) and paying off debts outside the plan that were not able to be included. Not for vacation, jewelry or a Hermes handbag.

Be that as it may - the advice I got from an attorney friend of my family who had read the correspondence this evening is:

"You have no action to take. Your attorney has not given you any direction of what to do so at this point you do nothing. You did what you are obligated to do under the law - informed your attorney of a change in your financial situation. Unless and until he gives you specific instructions, there is nothing for you to do."

"Specific instructions" being something along the lines of - go get a cashier's check made out to trustee or court or attorney, make sure it says your case number on it, send it to the court, send it to the trustee, send it to attorney. I have asked my atty 2x for specific hard information from him and have not yet gotten it.

(He does not know that I am not sitting here with a check or the money in a checking account. I did not tell him what I did with it. So it isn't that he is "not wanting to get involved" in "fraud." I think he wants me to keep my big (honest) mouth shut, quit asking him about it and just go along with the plan until it is concluded.)

Filing this BK was the worst mistake I have ever made, no thanks to the atty or the system. My life has been really horrible for the past 2.5 years and I have lived without many many basics due to my atty's inflexibility and basically "don't care" attitude. I did not know I was going to get an inheritance - in fact, I was shocked when I got the letter since I assumed there was no money in the first place (spent on nursing home and final illness).

It just doesn't make good sense to me to pay into a plan that is less than one year to being finished, money that I truly need - so that I can then pay MORE than the original plan called for as well as lose the original sum. If I thought any of my creditors were getting shafted, okay, that's one thing. None of them are. All of the unsecured creditors are getting paid at or near 100%.

Sorry to vent but I felt this was finally a piece of good luck for once in my life and I certainly know that many people have "disposable income" they don't tell the BK court about - and probably much more than my paltry inheritance. I don't feel it is moral issue - more of a risk assessment.

[Flamingo]

My question is about what kind of risk I may be taking, but I am NOT feeling guilty. I am paying in my fair share with my creditors and the court. The money that I have inherited is money that would go toward the necessities I still cannot afford such as new eyeglasses, a new computer (for freelance work so I can afford some of those necessities like water and heat) and paying off debts outside the plan that were not able to be included. Not for vacation, jewelry or a Hermes handbag.

Be that as it may - the advice I got from an attorney friend of my family who had read the correspondence this evening is:

"You have no action to take. Your attorney has not given you any direction of what to do so at this point you do nothing. You did what you are obligated to do under the law - informed your attorney of a change in your financial situation. Unless and until he gives you specific instructions, there is nothing for you to do."

"Specific instructions" being something along the lines of - go get a cashier's check made out to trustee or court or attorney, make sure it says your case number on it, send it to the court, send it to the trustee, send it to attorney. I have asked my atty 2x for specific hard information from him and have not yet gotten it.

(He does not know that I am not sitting here with a check or the money in a checking account. I did not tell him what I did with it. So it isn't that he is "not wanting to get involved" in "fraud." I think he wants me to keep my big (honest) mouth shut, quit asking him about it and just go along with the plan until it is concluded.)

I am just being honest and forthright with you as I know you are looking for confirmation/backup. There is always risk in something like this and since you were not totally forthright with your attorney that you received the check and passed it on to your father, it is now higher. Did you inform him of the amount of the inheritance? It if it small (few thousand dollars), there may not be an issue at all. A larger sum withheld can be trouble. Going through a 13 ourselves with a similar inheritance situation and working in a law firm, I am more exposed to seeing risks take place and the results so I am just telling you what I think you already know. You are looking for confirmation and seemed to have found it in your attorney friend. But it is not he/she who represents you and does not have the risk to worry about an his/her advice would not stand with the Trustee. You are assuming and guessing what will take place. Until you are totally forthright with your attorney as to the full information on this matter, you will always worry as would anyone in your situation. No one can tell you exactly what the risk will be, whether high or low, but there is risk. However I am sure most of us know where you are coming from as to your feelings but it appears you have already made your decision and will have to hope from now to your discharge that all will be OK. Best of luck to you.

[rrockinggramma]

Perhaps you could google the local BK rules of your state and district and see court opinions on how other's who have walked in your shoes have had to deal with this situation. You haven't spent any of the money yet and as your attorney is not willing to create any additional work for himself, you are probably stuck figuring it out for yourself. I looked at my plan and no where does it even mentioned if I knew if I was receiving an inheritance or not. I am in your position, to a point, as my mom is 86 and going downhill. Her estate is in a trust as well. And there is the 180 day rule but not sure if that applies only to chapter 7's. Perhaps you could contact the trustee's office and do a general inquiry without having to give specifics and see what they say. From my search on the subject, it is handled differently in all jurisidictions. And I agree with you, since you are close to finishing, it is cheaper to just make the payments to the trustee.

[emoney]

Lets cut to the chase. All of us are dancing around what is BK fraud. This is a criminal offence. You commit the crime, do you want to do the time is the question.
Any of those persons you spoke to could turn you in and if they helped they could be your cell-mate.
regards,
emoney

[Minnymouth]

The attorney your discussed this with.... Is this your Chapter 13 attorney?

Was it a verbal conversation only? Did you write down, time and date and details of conversation?

Does your attorney know the value of the inheritance and infact that your signed it over to your Dad to hold in his account?

Did your attorney specifically tell you not to "worry about it", that it was not necessary to report it???

Carefull............. this attorney may be covering his own A@@ and not protecting yours like he's supposed to be doing.....

He can be fined and disbarred for not reporting this "inheritance" to the Trustee..... since you have reported it to him.....

Don't get caught in the middle....... and don't spend this money until you know for sure that you will be keeping it........

If you are in a 100% payback plan, then the inheritance is likely yours to keep, as your creditors are being paid in full.

There's lots of things you need to consider here before you get into too deep.............. fraud? , jail time? etc if the Trustee finds out about the inheritance...

The fact that your reported it too your attorney helps cover your own butt............BUT you need to keep documentation of when you discussed this with him and what his advice was...........

COVER YOUR BUTT....................... wait it out if you think/hope it will slide by........... Report it to the Trustee.......... Your choice..............

[chpxiii]

I'm not saying what you should do, but only talking about what I have been told.

I filed under old law as well. I was told that *any* "windfall," ANY - inheritance, lottery winnings, large sums of gift money, I had to inform the TRUSTEE - not my attorney, THE TRUSTEE. And that was ANY "windfall," i.e. any *amount.* It would then be determined what, if anything, I would get or have to pay.

Not informing the trustee was against the bankrupcty law (I believe) and could be cause for my case to be *dismissed.* Fortunately (or maybe not fortunately, LOL) I did not have to worry about this.

So. To answer your question of what the risk would be is a possible dismissal of your case, as someone else mentioned, should the trustee ever find out.


PS: Flamingo, would it be possible if you didn't color your posts? The text is difficult to read.

[woeisme]

This thread has me thinking about inheriting $. The only people in my life I'd ever inherit anything from would be my Mother (she's in her mid 70's, moderately poor health) and my oldest sister (in her 50's). Mother has assets totally maybe 50-100K, which would be split 6 ways between siblings, so maybe 10-15K max. Sister has a lot more $, but has her money in a trust and I know she plans to leave most of it to charity with small amounts for relatives (maybe 5-10K?). So in either case, all of it would go to my trustee if something, God forbid, happened to either of them during the next 5 years. (I'm paying unsecureds 65%, so both amounts wouldn't even get me to 100%) I have a brother who is partially disabled from a stroke, and even before the BK I've tried talking my Mom into leaving my "cut" of her estate to him, not to me. Her reply is that I could give him the $ if I wanted to, but that since she's spent so much $ and time caring for him the past 8 years or so anyhow, it wouldn't be fair to the rest of us kids if she then also left him a bigger percentage of her (small) estate. I could kind of see her point since he's not totally disabled, in fact if he put any effort at all into his physical therapy, he'd probably regain a lot of function, (he'd skip appointments, not anything his therapist asked, until they finally reported to the insurance co. that his lack of cooperation made it pointless and a waste of money to continue sessions) but he'd rather be taken care of and just sponge off of her, spends all his disability checks on porn and doesn't help her out at all with groceries, utilities, etc. OK, i"ve really digressed, but my point, related to the original post, is what would I do under the same circumstance, where I got 10K or so in inheritance? Definitely would want to keep it, but definitely wouldn't want to blow my entire CH 13 BK over it too...

So how many of you would try to fly under the radar with it, vs. how many would report it to the trustee right away, no question?

Now I'm wondering if I should have another talk with my Mom about changing her will... I haven't told her about the BK because she would see that as a real failure on my part, but if I never inherit anything, I'll never be faced with the dilemia the original poster has.

[woeisme]

Lesa13,

You said your SS # would never be attached to this $. Are there any other identifiers on the paperwork that they would be able to trace to "know" that this money belonged to you, and not some other Lesa13? Somehow the attorney for the estate had to know it was you that the $ belonged to, not someone else with the same name as you, didn't they? I guess I was just thinking that while it might not be likely that they'd track the $ to you since there's no SS # or tax returns attached, there would have to be some kind of paper trail leading back to you....

[woeisme]

OMG, I just noticed that my signature changed from "contributor" to guru after I posted that last message!!! Guru I am not, chatty (postie?) I am I guess, lol!

[MOMof3]

If it were me, I would come up with a good number of expenses that have come up during the course of your 13 as well as anticipated future expenses that would offset the extra money. It sounds like you have several ligitmate ones, bills, eyglasses, etc... Then, have your attorney present these expenses with the fact that you've received some extra money. It's possible that you may be able to keep a good deal of the money and not risk fraud.

[imbroke2]

I wonder this all the time when I see people asking about inheritance, lottery winnings, etc. Unless it's a huge winfall, I know I would probably stash it away for emergencies or other things. My trustee doesn't hound me every month for our bank acct statements, paychecks or anything else. Of course my lawyer also said we don't have to worry about our tax returns or anything, that those are ours. We don't have to report it to him or the trustee.