Potential Inheritance AFTER filing!

[beezer32]

My father passed away about a month after filing CH7. I advised my attorney prior to the forthcoming 314 meeting.

During the 314 meeting, our attorney advised the trustee of the death and noted that my father held a quarter ownership of a 33 acre land parcel assessed at $75k.

The trustee immediately flagged this during the meeting and advised us and our attorney that when would need to investigate the potential for inheritance.

I am told that even though the land it owned by 3 other individuals, that the trustee could seize and sell the land, payout the other 3 individuals and force the inheritance of the remaining ownership to myself, so that the trustee can then sell and liquidate the value (maybe $25k) to distribute to my creditors.

My question is: Has anyone had any experience with a sudden conversion of a no asset case to an asset case like this?

We certainly weren't expecting my father's passing after filing BK and since then, certainly never thought about a potential inheritance. We don't even want it. We just don't want anything gumming up our CH7.

Any thoughts?

[despritfreya]

First, my condolences on your loss.  Thoughts, hugs and prayers to you and your entire family.

Unfortunately, the passing of your dad created a right to an inheritance.  Since that happened within 180 days of you filing, the inheritance, whatever it ends up being, belongs to the bankruptcy estate.  If there is no exemption to protect it, the Trustee has the duty to administer this new asset.

Under 11 USC 363, a trustee may sell the property even if there are co-owners.  What I suspect will happen, is that your trustee will first reach out to you to see if you want to purchase the 1/4 interest so that he does not have to sell the property.  Another approach is for one or more of the co-owners to purchase the bankuptcy estate's interest.

Since this is a family matter, might I suggest you reach out to the other co-owners to see if a settlement with the Trustee can be reached thus by-passing the need for the trustee to sell the property?  Discuss this with your attorney before doing anything.

Des.