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Roger
Roger, Attorney
Category: Bankruptcy Law
Satisfied Customers: 31593
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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I am in the middle of chapter 7 no-asset. My grandmother passed

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I am in the middle of chapter 7 no-asset. My grandmother passed on Friday and I anticipate that I will get an inheritance of some kind (not sure of total value or cash/asset mix). I also anticipate a tax return of around $5000. That I would be willing to use the return to try to settle the outstanding debts for the two biggest creditors and have the case dismissed prior to discharge. I was wondering if this is legal? My fear is that I will have to turn family heirlooms over for liquidation, and that my family will be made aware of my filing as a matter of probate.

Unfortunately, you can't just file a notice and dismiss the case and everything was as it was before you filed. Once the process has started, you have to get court permission to let you dismiss. Permission will only be granted if there's a very good reason.

 

If you want to dismiss the action, you should have your attorney file a motion to dismiss.

 

If you are not granted a dismissal, an inheritance becomes part of a debtor's Chapter 7 estate if the decedant (grandmother) died before the case was filed or within180 days after the filing. It does not matter if the estate was not probated or funds distributed - the relevant date is the date of death of the person leaving the property, which triggers the claim of the debtor.

 

Since the inheritance is property of the estate, you will need to amend the petition to reveal this asset and the Chapter 7 trustee will step into your shoes for purposes of liquidating the estate's interest. What will most likely happen - the trustee will contact the executor and the other beneficiaries and ask them to buy out the estate's interest, possibly at a discount since the asset is not liquid.

Customer: replied 7 years ago.

I filed pro se. I also put myself on a payment plan, the acceptance of which stated that failure to pay the total due would result in an automatic dismissal. Is this a way to get around the request for dismissal?

When would I have to notify the trustee of the inheritance?

If you have a repayment plan, you should not be in Chapter 7 as that is a complete liquidation. You must be in a Chapter 13.

 

In either case, you have to file a motion to dismiss and get the court to grant your request.

Customer: replied 7 years ago.
The payment plan is for the filing fees.

Oh, ok.

 

Like I said, the botXXXXX XXXXXne is that you're going to have to get the court's permission. If you allow the repayment plan to go into default, the court has the right to dismiss the action, which would work in your favor.

 

However, my suggestion would to file a simple motion to dismiss the case based on your increased income, which will allow you to pay the creditors.

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