How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask TJ, Esq. Your Own Question
TJ, Esq.
TJ, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 12207
Experience:  JD, MBA
Type Your Bankruptcy Law Question Here...
TJ, Esq. is online now
A new question is answered every 9 seconds

I need a second opinion. 33 months into a chapter 13 bankruptcy

This answer was rated:

I need a second opinion. 33 months into a chapter 13 bankruptcy (filed in Arizona), my wife's mother died, leaving us an inheritance tied to a living trust with a spendthrift clause (in California). I know that the trustee cannot access the trust assets to pay the unpaid creditors as long as it remains in the trust. My bankruptcy attorney stated that I can use the trust assets and the bankruptcy trustee cannot touch them. That seems fishy to me, and I'm sure the trustee is going to ask again to see my bank statements at some time, and I need to be sure that this is true before attempting to use any of the trust assets.

Is it true that I can use these assets in this situation?

Hello and thank you for allowing me the opportunity to assist you.

The trust itself may not be reached, but once money is distributed to you, you would have the duty to inform the bankruptcy trustee because of the increase in income. The bankruptcy trustee would then likely demand that your plan payments increase. Even if you don't inform the trustee, as you mentioned, if he checks into your finances (e.g., bank statements) and sees the money, then he'll probably demand an increase in plan payments.

So, I would likely wait until the bankruptcy is closed before accessing any of the funds in the trust.

Does that answer your question? Please let me know if you need clarification, as I am happy to continue helping you until you are satisfied. Also, your positive feedback is much appreciated.

Thank you for using our service!

TJ, Esq. and 3 other Bankruptcy Law Specialists are ready to help you