is this public record?

[mich]

I have a co-worker who filed BK(Chap 7) in Nov. 08, discharged Feb 1, 09 .
He confided in me (due to me filing BK also) that his wifes aunt
has recently died and she will be receiving a large sum inheritance
(before the 180 days ) He is under the assumption that inheritance
is not public record and the only way the trustee will find out is if
they are to inform her which apparently the wife does not want to do.
Is his information correct? Inheritance is not public record, and no
one will know? also, apparently the money is in a living trust and
taxes are not an issue. I do not approve but I would like to know
if this is true. thanks. .. . M

[JRScott]

Depends on your state and how its handled. If the local paper contains last will and testament notices then it is possible that the Trustee could notice if he or someone in his office reads the paper. The more people that know the more likely he's to find out too, you know they spout off about how they fooled the trustee on the inheritance then they make that person mad who later calls in an anonymous tip.....

However while he might not find out, if he does and they have not told him he can have the case reopened. Then file a motion to discharge it with prejudice, have them arrested for bankruptcy fraud, and let's just say it'll be a lot worse. They didn't have the money before and not having it after is not going to hurt them, they are much better off meeting their legal obligation of telling the Trustee and accepting they may get nothing.

[StartingOver08]

The discharge can be revoked.

Take a look at this:

Can the discharge be revoked?

The court may revoke a discharge under certain circumstances. For example, a trustee, creditor, or the U.S. trustee may request that the court revoke the debtor's discharge in a chapter 7 case based on allegations that the debtor: obtained the discharge fraudulently; failed to disclose the fact that he or she acquired or became entitled to acquire property that would constitute property of the bankruptcy estate; committed one of several acts of impropriety described in section 727(a)(6) of the Bankruptcy Code; or failed to explain any misstatements discovered in an audit of the case or fails to provide documents or information requested in an audit of the case. Typically, a request to revoke the debtor's discharge must be filed within one year of the discharge or, in some cases, before the date that the case is closed. The court will decide whether such allegations are true and, if so, whether to revoke the discharge.

In a chapter 11, 12 and 13 cases, if confirmation of a plan or the discharge is obtained through fraud, the court can revoke the order of confirmation or discharge.

http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/discharge.html

[floridian]

i read a similar situation on a lawyers blog... the IRS narced them out somehow and now they have criminal problems, for what its worth...

[CatsInTrouble]

He's going to get caught. It's always the people who HAVE to tell SOMEONE who gets caught. He was so dumb to have told you!

[dingdong]

If the inheritance is in a trust, there may be a spendthrift clause which MAY protect the inheritance from being taken by a BK Trustee.


Get a copy of the trust from the Trustee ( for the Aunts Estate, or the attorney representing the Tust.) She may not have anything to worry about. Also, even with a living trust, depending on the state, there is usually a claims bar date of about 120 days and any payment on the gift will be delayed until this time has passed, which means she may not be paid on the inheritance until outside of the 180 days)

I would check and see if there is a spendthrift clause first.

Here is a link discussing spendthrift clauses and BK

http://www.************************/...-of-state-law/