Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
Hi, I'd like to help you with your bankruptcy questions this afternoon.
I believe what you technically own is a future interest, more specifically a remainder interest subject to a term of years.
oh, ok lol
Regardless of what happens, you MUST revise your bankruptcy schedules to include this property interest.
do i refile or resubmit a portion of my filing?
You can just amend the schedules that would be affected... let me take a look at where this would go. Please give me a minute.
You have a future interest in property, so this should be listed in Schedule A.
Valuation is going to be tricky (you can use your best estimate, the Trustee will determine a more precise valuation)
i dont have a copy of my BK paperwork (long story) does the schedule A trickle down to other forms? I assume i need to fill it out and mail it to the trustee with a copy of the revocable trust? I will use my best estimate too. is there any possibility i will get to keep som of it? if not can it be used on the IRS and State of Washington Excise/L&I/Employment Security taxes I owe that are not dischargeable?
You own a 50% interest in whatever the property is worth, less depreciation and up to 10 years' loss of use (this is a number an accountant or actuary would probably need to calculate - I have no idea how exactly this is calculated mathematically).
You have an affirmative duty to amend your Schedule A; the Trustee will let you know if you need to amend anything else (he or she might be able to take care of it for you).
As far as retaining the future interest, this is question of whether the 2009 revocable trust qualifies as a "spendthrift trust" under state law.
If it qualifies as a "spendthrift trust," you would likely be able to keep your entire interest. If it does not qualify as a "spendthrift trust," it sounds like you have enough debt that the Trustee would likely sell your entire interest to pay your creditors.
This is a very technical and nuanced area of the law, so it's worth hiring a local attorney to help you with this. If you don't hire an attorney, it is very likely that you will be divested of your interest in the trust proceeds.
This interest is probably worth in the ballpark (very large ballpark) of $150,000 - the vast majority of trustees would definitely pursue this.
it was made in state of california, should i contact the attorney that created the trust to find out? it doesnt say anywhere on the trust documentation
And unfortunately, if you don't disclose the interest to the trustee, you would be putting your entire discharge (of all 1.86M in debt) at risk.
Yes, that would be a good start. There are certain provisions that should be in a spendthrift trust that vary from state to state.
i will follow your advice, does it need to be a local attorney or are you available for hire?
I'm sorry, I'm not allowed to take clients from this site. Also, I'm a Florida attorney, so I wouldn't be as helpful as a California trusts and estates attorney.
Do you have any other questions for me today?
last question, does the IRS and state taxes take priority over unsecured debt? i have multiple liens from these federal and state organizations against the company i used to own.
your advice is expert worthy, thanks!
Q: "Last question, does the IRS and state taxes take priority over unsecured debt? i have multiple liens from these federal and state organizations against the company i used to own."
A: Generally, yes, to the extent such taxes are valid Priority Claims pursuant to Section 507(a)(8)(A).
Note that although some taxes and other unsecured debts may be dischargeable, if your trust assets can be reached by the trustee, these unsecured debts will be repaid pro rata out of any remaining trust proceeds.
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