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coffeegirl · Feb 17, 2011, 05:29 PM

My husband and I filed for Bankruptcy 3 weeks ago and my mother just passed leaving me 1/5 of her estate. My debts belong to both my husband and I at least I am assuming that even though most debts are in his name only.

The inheritance is for me, not community property. Will the trustee pay only the debt that belongs to me against my inheritance? I filed Chap. 7 what options do I have so that my inheritance isn't taken? It is all I have and even then not more than $150K.

JudyKayTee · Feb 17, 2011, 05:37 PM

You have filed? I don't know the law - but I will look it up - but a friend of mine had a very similar situation. HE filed in bankruptcy. SHE did not. HIS debts were discharged (obviously hers were not), and she had to pay the JOINT debts. She kept the rest of the inheritance.

Did you file jointly or individually?

What does your attorney say? You have to list all assets and this is an asset, although it may be protected.

What is your total debt? I don't believe a Bankruptcy Judge is going to allow your debts to be zeroed out and then you walk away with an inheritance.

"Inheritance After Bankruptcy - Chapter 7 or 13 filers who come into an inheritance after bankruptcy should seek legal counsel to determine how additional assets of money or real property will be handled. When cash-strapped consumers come into large sums of money, it can be a cause to celebrate or cry. Federal inheritance tax laws prohibit debtors from concealing assets, including monies or property legally and rightfully willed to them. The irony is that if the inheritance had been awarded prior to making the decision to file, the debtor may have had sufficient assets to cover outstanding debts. Nevertheless, it's a case of too little, too late and now the courts have the last word."

http://www.christianet.com/bankruptc...bankruptcy.htm

AK lawyer · Feb 17, 2011, 06:50 PM

Originally Posted by coffeegirl

My husband and I filed for Bankruptcy 3 weeks ago and my mother just passed leaving me 1/5 of her estate. My debts belong to both my husband and I at least I am assuming that even though most debts are in his name only.

The inheritance is for me, not community property. Will the trustee pay only the debt that belongs to me against my inheritance? I filed Chap. 7 what options do I have so that my inheritance isn't taken? It is all I have and even then not more than $150K.

You say your husband and you filed. This means that it is a joint case: debts for both of you are paid from the bankruptcy estate. Any inheritance received within one year after you file wll be included in your bankruptcy estate and help to pay your debts. If you have not attended the section 341 meeting ("first meeting of creditors"), the trustee will probably ask you about this when you do. In any event, you have a duty to notify the trustee of it.

An inheritance is not exempt. It can and will be taken to help pay your creditors. You shouldn't "assume" that your husband's debts are yours. They probably are not.

Evidenty you are not represented by counsel. You need an attorney who is knowledgible in bankruptcy. I would consider moving to dismiss the bankruptcy, as to you.

coffeegirl · Feb 17, 2011, 07:52 PM

How do I find out if my husbands debts are also my debt? We live in a Community Property State (California). I do have legal counsel, but I'd appreciate any outside help, as I not thinking clearly since my mother's death last week. What do you mean "I would consider moving to dismiss the bankruptcy, as to you"? Thank you for your time, it is appreciated.

coffeegirl · Feb 17, 2011, 07:53 PM

Yes we have filed jointly. We listed all our assets and have discloused that I am an heiress. .

AK lawyer · Feb 17, 2011, 08:27 PM

Originally Posted by coffeegirl

... How do I find out if my husbands debts are also my debt? ...

Ask your lawyer.

Originally Posted by coffeegirl

... What do you mean "I would consider moving to dismiss the bankruptcy, as to you"? Thank you for your time, it is appreciated.

Because you said this:

"My debts belong to both my husband and I at least I am assuming that even though most debts are in his name only."

You and your attorney need to know this for sure. If most of the debts are your husband's only, by filing joint bankruptcy you are effectively paying your husband's debts out of your inheritance. It may be better if you didn't file bankruptcy for yourself, paid off all of your debts, and had something left of your inheritance, which I believe would not be a part of the community property.

Since you do have an attorney, you should have course get complete advice from that attorney who knows more about your situation than we do. I am not totally familiar with how California's community property scheme works or whether, under it, you are responsible for your husband's debts. Your attorney would know.

coffeegirl · Feb 23, 2011, 09:54 PM

Thank you I met with my Attorney tomorrow, but I did ask ask about the debt and it went something like this: If the debt was for the good of both parties, then it is my debt. I'm thinking, its because the debt was to purchase washer and dryers, dishwashers etc and not golf clubs or club memberships?? I don't know, I'll have to get more info. But thank you very much for all your advice.