I was ready to go Ch 13 in August 2010 when I received my 15K inheiritance check

I do not want to commit any fraud, so do would you suggest these payments/purchases of 15K are legal?

Put off filing bankruptcy for a year and spend the 15K:

- to pay 4K for my son's sophomore college tuition - I am divorced and in the settlement statement I am liable for 50% of my son's college expenses, i.e. I did not contribute to any of his freshman expenses

- to pay 6K to bring to reinstatement a lapsed whole life insurance policy - in the settlement statement I am to have a to have my son as a beneficiary

- to deposit 4K into a custodial trust bank account for my son - part of the inheiritance was an early distribution to my son of 4K, but I was cash strapped I cashed the check a year ago and used it for my expenses.


Other possible ways to spend the inheiritence:

- to buy a new PC for 1K for me, my current PC was bought in 2001
- to buy a new PC for 1K for my son for use in college

- to buy a used car for my son to commute to college, or at least pay for the bus to the college campus?

- to buy an IRA for myself

- to open a custodial trust account for any part of my 15K inheiritence?

- to payoff the balance of my loan against my 401K with my job?


Question:
If the inheiritence is tax free and I do not have to report it on any tax returns, how does the bankruptcy court know of it?

I appreciate all replies.

If you file chapter 7 or 13 you will have to report the money. You will have to report what you have as well as what you owe.

Ok It will be reported, no problem.

Any comments on my spending that 15K suggestions?

A wild idea, how about paying some of the debts you have. You legaly owe the people.

Insurance on child, replace with a term policy, child still has insurance cover, whole life is normally a bad investment anyway. ** next and sorry but if child is also in good health, just buy a new policy on them to keep coverage.

Sounds a lot like someone is living way past their means?
First 6 K to just reinstate a whole life policy on a child, in gods name how much coverage was there ?

Next 1000 for a computor, what do you do rocket science ?

You need to sit down and do a budget of why you can't afford basic life, you have borrowed against 401K, you are deep in debt and now it appears you want to basically throw away 15,000 instead of paying off debts with it.

Sorry but I would say no to any of it

Yes, I am deep in debt- almost all credit cards
As I got deeper in credit card debt, interest rates rose to 30% and greater
A "debt" spiral I propose, much like a "death" spiral
So the 401K loan was to help pay the growing minimum amounts on the cards
Over the years I suggest that I have repaid many times over the actual amount I charged due to the "legal" interest rates of the banks
Now I get a small inheiritence, compared to my debt, and I am finding it very difficult to just give it all to the banks

All I am asking in my questions above is advice on using some of the inheiritence to help right my financial life a bit before giving the reminder to the banks
The term instead of whole life insurance makes sense, and the bankruptcy judge probably will agree, thanks, this is the type of answer I am looking for
Again I do not want to commit any fraud through my questions
I respect your advice and experience in answering them

You made the comment you find it difficult to give the money to the bank,bet you didn't find it difficult when you charged things and lived beyond your means. Sorry but if you owe it you should pay it.