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socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 37869
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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I recently filed chapter 13 bankruptcy and would like to know

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I recently filed chapter 13 bankruptcy and would like to know how this will be affected if in the near future I receive money as personal representative of my father's estate even if the money is deposited into the estate bank account which has an EIN number and none of the money goes to any of my personal bank accounts, etc?
If you receive the right to payment from an estate during the Chapter 13 plan, and the bankruptcy trustee finds out, then the trustee can ask the court to reopen and modify the plan based upon changed financial circumstances. See Matter of Lybrook (7th Cir. 1991) 951 F.2d 136, 137; Matter of Tworek (BC D NE 1989) 107 B.R. 666, 667.

I had a customer who was a debtor recently who claimed that the bankruptcy trustee advised him differently. The customer claimed that a California bankruptcy judge has stated that only inheritance received within 180 days will be retained by the trustee. I asked the customer to get a citation for the ruling, because I could not find any supporting decision in the appellate courts.

He could not get the trustee to produce the citiation.

My comment then, and now, is that the trustee is your adversary and he/she will tell you whatever will benefit the bankruptcy estate -- even if it means flat lying about your liabilities. So, be careful what you hear, because there's a load of BS floating around.

Also, it's your attorney's obligation to advise you -- so, don't be afraid to demand an answer to an important question (though I understand that you may not have the money to pay the attorney's hourly rate -- or the attorney may be reluctant to contact you, because he/she knows you can't afford to pay).

Hope this helps.
Customer: replied 5 years ago.
How likely would the trustee find out if the money sits in the trust account and none of it goes into my personal accounts or is used for any large purchases in my name?
I can't give you odds. I can tell you that if you don't tell the trustee, and he/she finds out, he may try to have your case dismissed entirely. You can always act stupid ("Your honor, I didn't know that I was obligated to notify the trustee about this money!") -- but, I can't say how it might end up. Maybe you would just get a revised plan, which you could survive. Or, it could be worse.

One thing you definitely do not want to disclose is that you knew you should inform the trustee and you intentionally did not -- because that could get you a ticket to an 8 X 12 room with no view.

Hope this helps.
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