QUESTION
Can a trustee take an entire inheritance of $400,000 if the chapter 7 bankruptcy was for 41,000?
Asked on Jun 18th, 2014 on Bankruptcy - California
More details to this question:
Chapter 7 bankruptcy was filed Sept. 17th 2013 and resolved Oct 19th 2013 for $41,000 but an aunt passed in December 2013 in which the inheritance may be approximately $400,000. So I need to know if the bankruptcy is opened again, can the trustee take the entire amount of the inheritance for the creditors?
16 ANSWERS
Bankruptcy Attorney serving Walnut Creek, CA
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Alan E. Ramos Law Offices
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The trustee can take as much as necessary to pay all of the creditors and the expense of administrating the bankruptcy estate. The balance of the funds should be then returned to you.
Answered on Jun 23rd, 2014 at 8:47 PM
The trustee will take what is necessary to pay off the creditors and no more.
Answered on Jun 23rd, 2014 at 8:47 PM
Chapter 7 Bankruptcy Attorney serving Milwaukee, WI
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Law Offices of Deborah A. Stencel
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If the question is whether the trustee CAN take the money, the answer is yes in most circumstances. If the question is will you lose the entire inheritance, the answer is that you would receive whatever is left over after the debts and trustee's fees have been paid. You should still receive a significant amount of money. You should talk to financial planner on how to protect what you receive and to properly invest it. I?m sorry for your loss.
Answered on Jun 23rd, 2014 at 8:47 PM
A bankruptcy trustee is not a thief and cannot take more than the total amount of claims filed in your case, plus a commission for the work performed.
Answered on Jun 23rd, 2014 at 8:47 PM
bankruptcy Attorney serving Paul, ID
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Paul N. J. Ross Law, PLLC
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Yes. But everything left over will come back to you.
Answered on Jun 23rd, 2014 at 8:47 PM
No, he will hand you the remainder back.
Answered on Jun 23rd, 2014 at 8:47 PM
Bankruptcy Attorney serving Grand Rapids, MI
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David Andersen & Associates, PC
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The trustee will pay your creditors in full and take a portion for his/her fees. The excess will be turned over to you. Be sure to contact your attorney so they can update your petition for inheritance and contact the trustee.
Answered on Jun 23rd, 2014 at 8:47 PM
Bankruptcy Attorney serving Seattle, WA
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The Law Office of Marc S. Stern
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Anything inherited within 180 days of the filing is property of the estate. It must be reported and the failure to report can result in revocation of the discharge. It may also be a bankruptcy crime that is a felony under federal law. The trustee can only use money to pay creditors and reasonable administrative costs. (S)He does not get to keep the entire amount.
Answered on Jun 23rd, 2014 at 8:46 PM
Bankruptcy Attorney serving Livonia, MI
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Charles J. Schneider, P.C.
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The only amount that can be taken is the amount of debt owed, the Trustee's commission and the Trustee's attorney fees.
Answered on Jun 23rd, 2014 at 8:46 PM
Debt Relief Attorney serving Anaheim, CA
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Marlin Branstetter Attorney at Law
A trustee can only take what money is needed to satisfy valid creditor claims and administration fees.
Answered on Jun 23rd, 2014 at 8:46 PM
Bankruptcy Chapter 7 Attorney serving Los Angeles, CA
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The Law Offices of Peter M. Lively
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Chapter 7 trustees can't be 100% sure what the total claims against your bankruptcy estate will be until after a notice of claims bar date is served and the deadline for claims has passed. Therefore, they will typically hold the entire amount of liquid assets pending completion of their work and refund the unapplied amount to the debtor afterward. Trustee compensation is capped under 11 USC Section 326.
Answered on Jun 23rd, 2014 at 8:46 PM
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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Theoretically,the trustee can take the entire inheritance because inheritances the debtor becomes entitled to receive within 180 days are the property of the estate. However, the trustee can only keep enough to pay the creditors and the expenses of administering the Chapter 7. So, it would make sense for the trustee to accept much smaller amount that is calculated to just pay those items. But when there is money in a Chapter 7, trustees get greedy, very greedy, often they take 100% of the money and the creditors don't get a dime, even if the Chapter 7 has thousands of dollars. Hire a bankruptcy lawyer to negotiate with the trustee.
Answered on Jun 23rd, 2014 at 8:46 PM
Bankruptcy Attorney serving Cleveland, OH
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Benson Law Firm
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The Trustee should take only so much as is required to pay the unsecured creditors in full.
Answered on Jun 23rd, 2014 at 8:46 PM
No, only what is owed to the creditors. The Trustee will also be paid a fee for administering the estate.
Answered on Jun 23rd, 2014 at 8:46 PM
General Practice Attorney serving Coeur d'Alene, ID
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Michael B. McFarland, PA
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No. The trustee can only take enough to pay the bills and cover administrative expenses and fees. You should probably consult with an experienced bankruptcy attorney, however, to make sure things are handled correctly.
Answered on Jun 23rd, 2014 at 8:46 PM
The bankruptcy trustee can take up to the amount of the allowed claims. So if you only owe $41,000 the trustee will take 41k of the 400k to pay all the creditors. The Trustee may request that you turn over all or part of the money until the creditors have a chance to file claims. Once all the creditors are paid then the trustee will return any extra funds.
Answered on Jun 23rd, 2014 at 8:46 PM