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Hi...My husband and I were disabled in a car accident in 1998. Due to very high medical bills that are ongoing, we recently had to file for bankruptcy. We've lost all equity in our home ($70,0000 and have no savings at all. We live disability check to disability check. Our well is going dry and we need a new one as well as needing work done on our car to keep it going. Even with bankruptcy (filed in April, 2013-have not been released from our debts yet) we will still be struggling to hang on to our home...the loan is now under-water. I've been informed that I am named in my grandmother's trust that will be closing out "soon" (I have no idea when that is..I have not been contacted yet). My understanding is that this money (I have no idea how much it will be...the estimate is not over $10,000, if that). Would it be illegal, if the money becomes available before our bankruptcy (chapter 7)is completed if we asked that nothing be issued to us untl Janualy 2014. We so desperately need it for medical bills that are already accumulating again as well as getting the new well. It's our only source of water. I don't want to break the law....I just want to know if I have any legal options. Thank you.
Response: Unfortunately, yes it would become illegal if you ask this payment to be deferred because you would be concealing your asset from the bankruptcy Trustee. Bankruptcy fraud carries a sentence of up to five years in prison, or a fine of up to $250,000, or both. See 18 U.S.C. Sections 152 and 157.
Kindly note that 11 U.S.C. Section 541(a)(5) defines property of the bankruptcy estate as (5) Any interest in property that would have been property of the estate if such interest had been an interest of the debtor on the date of the filing of the petition, and that the debtor acquires or becomes entitled to acquire within 180 days after such date- (A) by bequest, devise, or inheritance; (B) as a result of a property settlement agreement with the debtor's spouse, or of an interlocutory or final divorce decree; or (C) as a beneficiary of a life insurance policy or of a death benefit plan. However, if this interest becomes available180 days after the date you filed for bankruptcy case, you do not have to report it to the Chapter 7 Trustee because the interest is not an asset of the bankruptcy estate at that time.