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Has anyone been in this situation with a Chapter 7?

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    Has anyone been in this situation with a Chapter 7?

    First, thanks for answering my questions, truly appreciate it. I'm hoping to file Chapter 7 individually even though I'm married, but one possible issue has come up and attorneys differ on their opinions. My spouse is on a joint account with her elderly mother who has dementia. My spouse manages her mother's finances and bills for assisted living. One attorney told me this money would be included as an asset, another said we could prove it isn't my spouse's money or a joint asset of mine. I can't do anything that would allow these funds to be touched due to my financial problems as this is all the money my MIL has to live off of. Anyone, ever had an experience like this?

    For my cases, such a bank account, while an asset to be listed, is an asset that the Trustee cannot “take”:

    11 U.S.C. §541 (d) states:

    “Property in which the debtor holds, as of the commencement of the case, only legal title and not an equitable interest, such as a mortgage secured by real property, or an interest in such a mortgage, sold by the debtor but as to which the debtor retains legal title to service or supervise the servicing of such mortgage or interest, becomes property of the estate under subsection (a)(1) or (2) of this section only to the extent of the debtor’s legal title to such property, but not to the extent of any equitable interest in such property that the debtor does not hold.” (Emphasis added.)

    Now, this provision discusses an interest in real property/mortgage but that is qualified by the words “such as” meaning that the property description is an example of what “legal title” could look like.

    I have always taken the position that if my client’s money was never put into the elderly parent’s account, while my client may be on legal title, the money sitting in the account does not belong to him/her. We list the account on Schedule A/B and state that the Debtor has legal title only with no equitable interest. The amount we list as “value” is $0.00.



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