Just Filed & Father Died

[MomIcantFindmy]

I don't think you could come out with a better credit rating because you already took the BK hit and it doesn't go away for a long time. What would stop the creditors from dropping their claims just because you negotiated half? Creditor will just claim they never submitted paperwork to the court to drop claim if you ask.

decide what amount you are willing to pay. Offer it with the condition that no 1099(?) is sent to you or the IRS. In this day and age, it may work.

Do NOT do that. Do not even try to negotiate that the 1099 not be sent to you or the IRS. That is IRS fraud and you could end up in jail or with fines that make the 30K go away REAL fast.

Again, sorry about your Dad. Please think clearly here and good luck! Keep us posted!!

[MomIcantFindmy]

I am sorry to hear about your dad.

You can have your case dismissed and then refile? If you refile you do not have protection of the stay. Hummm...if you buy two autos with cash then you would have to make sure the amount they are worth would fit into your exemption. I think this sounds like you might be playing with fire a bit and I would think very carefully.

One thought that keeps going through my head is if you owe 40K and the inheritance is 30K why wouldn't you give it up just to be done and out of debt once and for all. It would seem to me taking the money would be the last option. Just my thoughts.

[pigpen75]

Isn't the new trustee going to ask you why never never showed for the 341 on your first chapter 7? If so, what are oyu going to say? I understand your situation and not wanting the trsutee to get part of this money that your father intended you to have. I hope everything goes the way the attorney says......

I'll talked to my lawyer about that, but I think anyone even a lawyer can understand "Grief".

[jessegirl]

Isn't the new trustee going to ask you why never never showed for the 341 on your first chapter 7? If so, what are oyu going to say? I understand your situation and not wanting the trsutee to get part of this money that your father intended you to have. I hope everything goes the way the attorney says......

[pigpen75]

****UPDATE****
I just got done talking to my lawyer. The conversation was a little interesting, to say the least.
He said to skip out on the 341 meeting. The trustee should reschedule another one for about a month or so later. The lawyer or one of his reps will go to the second one and say they haven't heard from me. He then told me the BK should be dismissed within 30 days or so. Once and if we get it dismissed, let both automobiles get repossesed, by a couple more dependable ones with cash, so (i'm no longer upside down). Take the rest of the $ and put it in to my morgage. We then will file again in a few months. He says the second time we will get a new trustee and everthing should be fine. I asked him what the worst that could happen, and he said I would lose the inheritance, So I guess I got nothing to lose? What do you guys think?

[pigpen75]

I'm speaking with my lawyer on Wed and i'll keep you guys informed. My 341 meeting is on Dec 22.

[CindyLou]

You can't be paying creditors while in an open BK. the trustee will take all the money back and distribute as he sees fit. That 30,000 is property of the BK estate. You need to speak with the trustee ASAP!!!

[lrprn]

Pigpen, you said in your original post that you filed Ch 7 and your father passed away "about that same time". Did your father pass away BEFORE or AFTER you filed?

If he passed away before you filed, then the inheritance will be considered a part of your estate and will be taken in full by your trustee to pay your creditors. However, the remainder of the debt will be wiped out and you'll start with a clean financial slate with no taxes due.

If he passed away after you filed, then the inheritance won't be a part of your estate, but it will still be taken because the inheritance came within six months of your filing date. Same situation though - the $30K will go to pay off creditors but the remainder will be wiped out with no taxes due.

However, allowing your case to be dismissed so that you can keep the money to pay creditors yourself but still be reponsible for paying the remainder of the debt yourself PLUS have to pay taxes on whatever is forgiven by your creditors PLUS have the filing on your record for 10 years may not be the right choice in this situation. Go back to your lawyer and carefully talk through what each option - staying in the Ch 7 or allowing it to be dismissed - works best for you financially in the long run.

You can only do this once - you can't go back and reopen the 7 if you mess up and allow it to be dismissed. Go get reliable information to make a sound decision for yourself.

[AngelinaCatHub]

If -- and this is only IF - you go the settlement route, here's what I would do:

YOU decide what amount you are willing to pay. Offer it with the condition that no 1099(?) is sent to you or the IRS. In this day and age, it may work.

[GreenInkOnPaper]

If -- and this is only IF - you go the settlement route, here's what I would do:

YOU decide what amount you are willing to pay. Offer it with the condition that no 1099(?) is sent to you or the IRS. In this day and age, it may work.

[Help!]

One more option. What if I just paid off my 2 cars and put the rest toward my student loans before any of my hearings?

Not a good idea IMHO. The trustee could then take the cars and go after the money paid on the student loans as preferential payments. Be careful.

[pigpen75]

I second this, and would add one more point to think about. Let's say you don't show at your 341 hearing, your case gets dismissed, you negotiate a 50% payback to your creditors... then get a $30K check in the mail and pocket $15K. As remote as the possibility sounds, the case trustee could learn of this inheritance and believe that you effectively shielded part of that inheritance from liquidation by ducking out of your BK.

If you really don't want to go through with the BK (and I can't imagine why you wouldn't since your credit has already taken the hit), you might consider formally filing a motion to dismiss, explaining the circumstances at the hearing and protecting yourself from any perception that you were hiding anything.

My opinion is that case trustees tend to hone in on anything that looks interesting, especially assets, and that it is better to openly communicate than to strategize.

One more option. What if I just paid off my 2 cars and put the rest toward my student loans before any of my hearings?

[Help!]

I'm sorry to hear about your Dad,
I don't see where letting your case get dismissed is going to be a good thing for you.
If like the other poster said you and you work a deal to pay half they are going to send you a 1099 and you are going to pay tax on it. And they can sell that debt for someone else to collect.
You have already tanked your credit by filing and the 30K is not going to get you out of debt completely.
It depends on what you want.

I second this, and would add one more point to think about. Let's say you don't show at your 341 hearing, your case gets dismissed, you negotiate a 50% payback to your creditors... then get a $30K check in the mail and pocket $15K. As remote as the possibility sounds, the case trustee could learn of this inheritance and believe that you effectively shielded part of that inheritance from liquidation by ducking out of your BK.

If you really don't want to go through with the BK (and I can't imagine why you wouldn't since your credit has already taken the hit), you might consider formally filing a motion to dismiss, explaining the circumstances at the hearing and protecting yourself from any perception that you were hiding anything.

My opinion is that case trustees tend to hone in on anything that looks interesting, especially assets, and that it is better to openly communicate than to strategize.

[jessegirl]

You need to get into a deep discussion with your attorney about the money. Why would you not continue with your 7? Its already on the credit report, so that will be there for 10 years. Do you have a wild card exemption in your state? Aren't you allowed to have some money in the bank? Talk to you attorney about how much the attorney will take. I know it bothers you that its your father money and why should they get wht you dad worked hard for and is going to leave you. I understand the way you feel and it might not be as bad as you are thinking. Your attorney needs to give you all the necessary information on what you can keep and what the trustee will take. As far as transferring it to your brother, that is fraud and yes it will look like fraud. I am sorry for your loss.

[TEW]

JMHO that money is already gone you maybe able to save some of it by continuing your case if you let it get dismissed I don’t see how the 30 K is going to help you other then reduce some of the debt. Have you talking to your attorney about the amount that is exempt. Be very careful paying things off that can become a 2 edge sword.
You need to think carefully about what you are doing I am sure at this time it is very hard.