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By Steven P. Taylor, J.D.
Founder of the Law Offices of Steven P. Taylor P.C.

If you become entitled to receive an inheritance after you file for bankruptcy in Indiana, it may be part of your bankruptcy estate. In a Chapter 7 bankruptcy case, it can become part of the assets that the Chapter 7 bankruptcy trustee can take unless it’s protected by an exemption. In a Chapter 13 case, receiving an inheritance does become part of the bankruptcy estate and may increase the amount you have to distribute to your unsecured creditors.

Becoming Entitled To Inheritance Within 180 Days of Filing Bankruptcy

With respect to a Chapter 7 bankruptcy, whether or not an inheritance becomes part of your bankruptcy estate depends on the timing of the inheritance. If you become entitled to the inheritance (not receive) within 180 days after you filed, the inheritance becomes the property of the Chapter 7 bankruptcy estate. 11 U.S.C. §541(a)(5)(A).  You should immediately advise your attorney and are required to notify the Chapter 7 Trustee and Court.  As you may recall, when you file for Chapter 7 bankruptcy, a trustee is appointed to ascertain whether you have assets which the trustee can liquidate and use those funds to pay your creditors.  Some of the debts get paid and the remainder will get discharge, leaving you free to move on from crushing debt.

Likewise, if you become entitled to the inheritance (not receive) within 180 days after you filed, the inheritance becomes the property of the Chapter 13 bankruptcy estate. 11 U.S.C. §541(a)(5)(A). With respect to a Chapter 13 bankruptcy, the consequences of becoming entitled to receive an inheritance also depend on the proposed distribution to unsecured creditors in your plan.   In a Chapter 13 Plan, you must provide a dividend to your unsecured creditors equal to the amount they would receive as if you had filed Chapter 7.  If your dividend is now insufficient, you will need to modify your plan to increase the dividend.  This can be done by an increase in your monthly payments or by devoting a portion of the inheritance when received to the Chapter 13 Trustee to satisfy this requirement.

Potentially losing an inheritance can be an emotionally upsetting time; however, remember that you must be completely honest and disclose all debts and assets to the court.   If the court finds that you misled the court about an inheritance, the Court could impose monetary penalties, dismiss your case and still be required to give up all or some of your inheritance.   Potentially, your actions could lead to an investigation by the government for fraud, which can lead to hefty fines or incarceration.  Therefore, if you do become entitled to inherit within 180 days of filing for bankruptcy, you must disclose that fact to the court and trustee by amending your bankruptcy Schedule B, and maybe C.

• You must amend Schedule B and disclosure your interest in underlying assets of the inheritance and an estimated value. If you are claiming the property as exempt in some fashion, you must also amend Schedule C.

As may be gathered, the trigger is that you have become entitled to the inheritance.  It doesn’t matter when you actually collect the inheritance, even if it is after your bankruptcy is supposed to be over. The date that matters is the date entitled to the inheritance become effective (i.e., the date the decedent passed away).

Becoming Entitled to Inheritance After 180 Days of Filing Bankruptcy

With respect to a Chapter
7 bankruptcy, If you become entitled to an inheritance more than 180
days after you file, the consequences are significantly different. The
inheritance is not part of your bankruptcy assets.  Therefore, a Chapter 7 trustee cannot claim
the inheritance and try to liquidate it for the benefit of your creditors.  It is all yours.

With respect to a Chapter 13 bankruptcy, however, the Court and Chapter 13 Bankruptcy Trustee may still require to amend your plan due to becoming entitled to an inheritance, even if more than 180 days have passed since you filed.  This is because under 11 U.S.C. §1306(a)(1), your Chapter 13 bankruptcy assets include all assets acquired until your case is closed, dismissed or converted.  While technically, you are not required to pay an increased dividend to your unsecured creditors by reason of becoming entitled to this inheritance; the Chapter 13 Trustee will require you increase the dividend to the unsecured creditors by some amount.  (By the way, this can happen when your income and assets increase for any reason during the Chapter 13 bankruptcy repayment plan period, from three to five years.)

Steps to Take to Keep Inheritance

If you are aware that you are the beneficiary of a will of a person who may be passing within 180 days of your anticipated bankruptcy filing date, you may want to suggest that your entitlement be left to you as a beneficiary of a spendthrift trust.  Some courts have held that a true spendthrift trust is not part of the bankruptcy estate.  Contrary to conventional wisdom, spendthrift trusts are not solely for the well-to-do.  Having this discussion with a loved ones who want you to have something with they pass can honor their wishes and allow you to avoid the hassle of dealing with bankruptcy trustee in a bankruptcy proceeding.

Find an Attorney

If you file for bankruptcy in Indiana and receive an inheritance, bankruptcy laws require that you disclose the new assets to the court and trustee. If you anticipate that you may inherit property while in bankruptcy that you really want to keep, you may wish to discuss your case with an experienced Indiana attorney to determine how to protect your inheritance from bankruptcy or how an inheritance will be treated during the bankruptcy.

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Student Loan Change from Forbes Magazine

Worthless Student Loan Debt Relief Scam – Consolidation and Forgiveness

Never pay upfront for “help” with your student loans
Student loan trap
According to the Federal Trade Commission (FTC) scammers stole millions from innocent student loan borrowers who were doing their best to workout their student loans.  These sleazes lied to innocent borrowers, saying that for $1,000 upfront, they could permanently reduce or eliminate the monthly payments.
Lied about connection with U.S. Department of Education or the loan servicers
The FTC alleged that the defendants’ companies bilked millions from people trying to lower or eliminate their student loan debt. The defendants marketed on social media platforms, including Facebook. According to the FTC’s complaint, they misrepresented that they were affiliated with the U.S. Department of Education or the loan servicers, and falsely claimed that consumers who paid an upfront fee of up to $1,000 were qualified or approved for permanently reduced monthly payments or loan forgiveness. In fact, the complaint alleged, the defendants had no affiliation with the U.S. Department of Education and operated a service that provided no relief.
The defendants’ Los Angeles-based companies used the following names: Alliance Document Preparation, LLC; EZ Doc Preps; Grads Aid; First Document Aid; SBS Capital Group, LLC; Grads United Discharge; SBB Holdings, LLC; Allied Doc Prep; Post Grad Services; United Legal Center, LLC; Post Grad Aid; Alumni Aid Assistance; United Legal Discharge; United Legal Center, Inc.; Grads Doc Prep, LLC; Academic Aid Center; Academic Protection; Academy Doc Prep; and Academic Discharge.
HOW TO PROTECT YOURSELF FROM STUDENT LOAN SCAMS:
Student Loan Consolidation Scam: What To Do (reprint from Forbes article)

1. If a student loan company says it has a “relationship” with the U.S. Department of Education, don’t work with them.
2. Legitimate student loan companies clearly disclose that they are independent companies that are not affiliated with the U.S. Department of Education.
3. Never pay a fee for student loan consolidation. Student loan consolidation is completely free through the federal government.
4. Remember, student loan consolidation helps you organize your student loans, but does not lower your interest rate or your monthly payment. Visit Studentloans.gov or call 1-800-557-7394 for more information on student loan consolidation.
5. If you want to lower your interest rate or monthly payment, then refinance student loans. Plus, student loan refinancing rates just got cheaper.

Student Loan Forgiveness Scam: What To Do

1. No third party student loan debt company will “forgive” your student loans.
2. Don’t pay an upfront fee for student loan forgiveness.
3. This scam sounds like Public Service Loan Forgiveness, which is a federal program for public servants with federal student loans. Income-driven repayment plans also can offer student loan forgiveness for federal student loans.
4. You can report the scam to the Consumer Financial Protection Bureau (CFPB). You can also report the scam to the Federal Trade Commission (FTC) or call 1-877-FTC-HELP (1-877-382-4357).
5. If your goal is to lower your student loan interest rate and monthly payment today, the best way to lower your student loan interest rate is to refinance your student loans. This student loan refinance calculator shows how much you can save when you refinance student loans.

FTC sends more than $5.4 million to people who paid for worthless student loan debt relief.

The post Worthless Student Loan Debt Relief – Consolidation & Forgiveness appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.

In the earlier series on real estate closing, Wynn at Law, LLC mentioned easements. In fact, we bring up the topic every time we review a title or write an article about one. The reason is simple, just like the old proverb that good fences make good neighbors: Clearly defined easements keep property owners out of court.
An easement on a property allows a landowner to grant access to a part of his or her property. You grant access without giving up ownership of that part of the property. It’s a binding agreement. Where we see this commonly throughout southeast Wisconsin is allowing access to a walking path, a driveway, a community pier, or a utility line crossing the property. Without an easement in place for access to such things, anyone attempting to access the path, pier, driveway or utility pole would be trespassing on the property. You can see the legal ramifications.
That means: Talk to your attorney anytime the word comes up. Here are a few spots in which the topic may come up.
If you are buying a property
Two easement issues Wynn at Law, LLC sees frequently are easements for driveways and for lake rights or lake access. When there are disputes over the area of the easement, or the size or the situations for which the property can be used, it can sour a neighborhood. Nobody wants to be ‘that neighbor,’ especially when you’re new to the neighborhood. By the way, if a lender is involved, the lender may take issues with driveway easements. Driveway easements require you to have legal access to your property. Imagine the difficulty clearing up the easement specifics after the closing.
If you are selling a property
When you know of an easement exists, you should disclose that to potential buyers on the real estate condition report. If you do not have a written easement in place or it is not recorded with the Register of Deeds Office, Wynn at Law, LLC can assist you in drafting and recording the easement.
Your relationship with your neighbors is the important aspect of easements. It is important to have a lawyer review easements on your property because it is your property.
 
Image by Anna Koldunova, used with permission.
The post In real estate law, there’s no such thing as an ‘easy’ easement appeared first on Wynn at Law, LLC.