Options after Ch. 13 dismissed

[brtb]

Hi,

DH and I are 2 years into our Ch. 13. DH is currently unemployed. After reviewing our 2012 tax returns our trustee is questioning a family trust (revocable) that I have where I get an interest payment yearly for the last 8 years after one of my relatives died. He's asking for the trust documents. I really don't want to have to go to my family for this document. Ch. 13 has been a very difficult decision for DH and I and very private and to have to reach out to my family to get this information is not an option for me.

Worst case scenario, if I don't give the the documents and our Ch. 13 gets dismissed do we have any options to turn to?

Thanks!

[murph996]

brtd,

My 2 cents...

You do not want to get your case dismissed. You've gone through 2 years. You will get credit for payments the trustee made to your creditors. But they can add on interest and start piling on fees, etc. Anyone that didn't file a claim now has a right to collect on the debt. If there are mortgage arrears being paid through the plan, you may risk foreclosure.

If you are worried about your privacy, you do not need to tell your family the exact reason you need the documents. Tell them that it is for tax purposes. You need to swallow your pride. Getting a Chapter 13 dismissed after you worked so hard because you don't want to talk to family should not be an option.

[brtb]

Thanks for your reply. I know you're right. It's a hard pill to swallow. My aunt and cousins are also beneficiaries of this trust and I feel like this is a huge disappointment. Plus, my cousin is an attorney, and won't buy the "tax purposes" reason.

I wish all of this would just go away.

[murph996]

There's nothing to be embarrassed about. You made a financial decision, don't feel ashamed. The toughest thing I ever had to do was call my father when all of this went to a head. They may surprise you with their reaction if they do find out about your CH 13.

Also, I think it would be possible that the IRS or accountant would ask for trust documents. I don't think they will jump to a bankruptcy conclusion.

[Pjmax]

After 2 years, and you are considering trashing it out of pride? You might be very surprised at the reaction, and frankly, if the relative you need to ask doesn't understand, I'd say 'the hell with 'em.' You're dealing with your debt in a responsible manner, what's not to understand?

Could you say you need the documents because you are preparing or revising your wills?

[brtb]

I was actually thinking about that...(preparing/revising wills). You're both right and we're almost at the 1/2 way mark, why give it all up now?

[LadyInTheRed]

Your state law probably gives you a right to a copy of the trust. You dont need to give a reason. Is the trustee of the trust represented by an attorney? If so, call the attorney and ask for a copy. The trustee will probably find out. But at least you can avoid a family member asking why.

This would be a really stupid reason to let your case be dismissed.

[keepsmiling]

What they all said^^^.
You have a right to those documents anyway. No reason needed. You're putting all of your financial affairs in order. If they ask.

[brtb]

The trustee of the trust is my aunt. Sadly, I have no other information.

On another note, our attorney, although he got our plan confirmed and everything he is rude and condescending. He sends me an email "To get the trust papers! Get in gear!" I politely replied back that I needed to know what he specifically needed. I can't wait until all of this is over. So many lessons learned.

[AngelinaCat]

And if you feel the need to explain further, say that you are "doing your Estate planning". Those trust documents are part of it.

Also, another thought occurred: I am not sure about your state law, and revocable family trusts, but it may well be that they have been recorded in the courthouse wherever this trust was created. That is a matter of 'public record' and you can request a copy from the courthouse. It may cost you $1.00 per page or so...

I suggest that because we have a Trust, though a slightly different instrument than a revocable family trust. Our state's laws didn't require it to be recorded, though. As I said, it was a thought...

[LadyInTheRed]

Also, another thought occurred: I am not sure about your state law, and revocable family trusts, but it may well be that they have been recorded in the courthouse wherever this trust was created. That is a matter of 'public record' and you can request a copy from the courthouse. It may cost you $1.00 per page or so...

If the trust was set up properly before the death of the trustor, all of the assets were transferred to the trust and there is no dispute about the trust, it is very unlikely that there is any court record of the trust. Two of the biggest reasons to create a trust are to avoid administering an estate in court and to keep the matters of the estate private.

I also meant to point out that while the title of the trust may include the word "revocable", it probably became irrevocable when the trustor died. If there were two trustors and only one died, then it probably divided into at least two trusts. One would be a revocable trust containing the survivor's property, and the other would be an irrevocable trust containing the decedent's property and could be for the benefit of the survivor and/or others.

Here's a link to the Virginia law regarding rights of trust beneficiaries to receive information, including a copy of the trust: http://www.lawserver.com/law/state/v...code_55-548-13

[brtb]

Update: So, I called my aunt last night to ask for a copy because we want to update our will, which is partially true. We need to do that, as well. I got the run around. She said that our attorney could call her if he had any questions and that she might be able to get me something within the next couple of week. This is what I'm dealing with. Control. DH and I are looking at all scenarios.

Another question. We give our trustee our tax returns and any refunds we get. This was not new information on our return. It was on our 2011 return as well as 2010. Why is this an issue now? Our attorney is saying because I left it off Sch B. Honestly, I didn't even think about this trust at that time. I get this small check each year and didn't even think of it as income. If I was being fraudlent I wouldn't have even put it on our tax return. Of course, everyone is blaming me.

[LadyInTheRed]

Why is this an issue now? Our attorney is saying because I left it off Sch B. If I was being fraudlent I wouldn't have even put it on our tax return. Of course, everyone is blaming me.

Has anyone accused you of fraud? If not, don't worry about that. Just get the trust. I suggest you right your aunt a letter requesting it. You may want to refer to the law I linked to above that gives you a right to a copy.

This is an issue because your interest in the trust is an asset and a source of income. The trustee probably wants to make sure that you are paying enough to unsecured creditors to cover its non-exempt value (future payments have a current value). As your attorney said, it should have been on Schedule B. It might also be that the income should have been on Schedule I. Blame is irrelevant. What matters at this point is to deal with the situation by responding to the trustee's requests.

[brtb]

Thanks for your reply. Your link was very helpful. I did say that as a beneficiary that I do have a right to the documents.

I never knew all of the details of this trust. My grandfather saved and saved and now it all could be at risk. I'm just really depressed, stressed, and wish this would all go away.

[Pandora]

You're too worried about "the Jones's" finding out you filed BK; as I've told many people on here and have done so myself when we first filed Ch 13 - if someone gives you grief tell them you are accepting donations or are willing to hand over all bills for them to pay. People need to stop worrying about what "others" think - its a business decision, period.

If your trustee is asking for documentation, then provide it and screw what someone else thinks. You're willing to throw away 2 years of payments over something that doesnt even matter. Would you rather have your lawyer request the document from your aunt - or would you?