QUESTION
What are my options if I inherited a house while in Chapter 13?
Asked on Mar 22nd, 2017 on Bankruptcy - South Carolina
More details to this question:
I'm a little over 2 years into my chapter 13 and I'm currently living in a house that my grandma/uncle owns. I paid very little rent but that's going to change since my grandma passed away. She left half the house to my brother and I and my uncle will sell the house unless my brother and I buy his half. My brother alone cannot qualify for the amount needed to keep the house and I'm in a dilemma since I'm on chapter 13. If my uncle sells the house then I get some money due to the inheritance but if my brother and I are able to purchase his share, then my payment (could be considered as rent?) would only go up a little. If I were to move out, I'm not sure where I could find a better deal to live.
5 ANSWERS
Good morning. Asking legal questions like this is like going to a medical website and asking about reoccurring headaches. It might be a headache that aspirin can handle, or it could be a brain tumor requiring surgery. Pay an experienced BK lawyer for 90 minutes of their time so they can review your entire CH13 BK file with you, and discuss options. Now is not the time to be penny wise and pound foolish.
Answered on Jun 15th, 2017 at 5:47 PM
Bankruptcy Attorney serving Seattle, WA
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The Law Office of Marc S. Stern
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It is something that you need to discuss with your bankruptcy attorney. It gets worse. If you inherit during a Chapter 13, the inheritance becomes property of the estate. If the house is sold and you get money, it probably needs to go to the trustee. You have a complex situation and need to consult with counsel before doing anything.
Answered on Jun 15th, 2017 at 5:47 PM
1 Award
Some courts in the country require people in a 13 to pay into the plan inherited money. Some do not. This is a very technical legal question and need to discuss it with your attorney.
Answered on Jun 15th, 2017 at 5:47 PM
Commercial Attorney serving Columbia, SC
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Gleissner Law Firm, LLC
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You do have the option to purchase your Uncle?s ? interest with your brother. Apply for the loan with your brother and see if you qualify to get enough to purchase your Uncle's interest. If you do, go to your bankruptcy lawyer and tell him that you need to borrow money. He will file a motion to allow you to borrow the money that spells out the term of the loan and the purpose of the loan and its impact on your Chapter 13. Good luck.
Answered on Jun 15th, 2017 at 5:46 PM
Bankruptcy Attorney serving Madison, WI
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Richard B. Jacobson & Associates, LLC
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The problem appears to me that any property you acquire (other than earnings from work) are potentially part of the bankruptcy estate. See 11 U.S.C. sec. 1306(a)(1). So you will have to discuss this event with your Ch. 13 trustee, and try to work out some deal with him or her which would allows you to keep the inheritance. Your lawyer should have explored this matter with you before you filed, because there are lawful ways to protect such an asset before a bankruptcy filing. Good Luck. Incidentally, if you have not already done so, you should find a skilled bankruptcy lawyer to represent and advise you. It's almost always worth the investment.
Answered on Jun 15th, 2017 at 5:46 PM