Question about Reopening of Chapter 7 Case

[exhausted2]

I just need some reassurance since it's a weekend and I can't talk to our lawyer's office. We went through Chapter 7 and were discharged a couple months ago. We received an inheritance recently, not a huge one, but we turned it over to the trustee as required. Our paralegal said it wouldn't be a problem in terms of the discharge that has taken place, etc. since the inheritance came in after our discharge and we had no prior knowledge of it. Today I got a letter from the BK court saying they were reopening our case "for distribution of the inheritance". That doesn't sound unreasonable but I've been feeling panicked anyway since everything about the BK stuff panics me! This doesn't take back the discharge that is in place does it? I assume this just means they will give out the money and then reclose the account?

And I just wanted to add that although I have never (until now) posted here I have found this forum to be a big help as we went through the BK process for information/advice and reassurance. Thank you!

[Cassiopeia]

It's my understanding that if the inheritance came in within 180 days (6 months) of FILING the bankruptcy, it would be used to pay off creditors. Whether the bankruptcy is discharged or not.

I posted recently about this, somewhere down the page, "inheritance question".

[exhausted2]

Which makes sense to me -- we turned it over and it will go to pay towards the creditors. And as long as that's it I'm fine with it -- I'm just nervous that it will reopen problems with the creditors or something which because the case was discharged should be settled. I just want that to stay settled since we went through everything to get there!

[keepmine]

You're OK. You complied with the bk law. All the trustee is doing is reopening for the purpose of distributing money to creditors. It'll not affect your discharge. All the creditors can do is accept whatever the trustee gives them.

[JRScott]

The Trustee has to reopen the case in order to distribute funds. He has to do it so that the creditors can file their claims to the funds. Its just part of the system and shouldn't affect your BK status beyond the distribution of funds he has received. Then it'll close again.

[exhausted2]

Thank you everyone for answering -- I feel much better. I just about worried myself into the ground during the whole BK process and just seeing a letter from the BK court turns me into a mess -- so I really appreciate the input and reassurance!!!

[JRScott]

Glad we could help

[CityGirl]

My friend filed in 1997 and 3 months later won 11K in the lottery but never told anyone. How would they find that out? They don't keep taps after discharge. Are you just being honest? I wondered because obviously my friend wasn't but he never got caught or anything because his attorney told him that he was discharged and that's the end of that.

[keepmine]

Why do think he would need to report the lottery winnings? The word lottery can't be found in the bk code but, inheritance is covered.
A probated will is a public record. If a trustee pulls up that datanase or a creditor that was discharged does an asset search then the downside can be pretty severe. Not worth risking getting the bk dismissed.

[yeahdischarged]

Be prepared for a drawn out process, but don't get nervous. If you were a no asset case, then the trustee will send a letter out, giving your creditors probably at least 60 days to file what is called a "Proof of Claim". Then, once that date passes, the trustee will distribute your inheritance fairly amongst the creditors who actually took the time to file the POC. Then once that is all done (and some trustees take their sweet time), then you will be discharged and closed again.