Receiving inheritance in the middle of filing ch13

[Anonymous]

Hello, I'm new here and have quite a dilemma that I could use some advice on. I currently owe approximately $25,000 in unsecured debt due to a car accident, losing my job and making some bad choices a few years ago. I have since been served with two judgments. I filed a ch7 in 2014 when I got divorced so I'm not eligible to file again until 2022, hence the Ch13. 

My father passed away a year ago yesterday. My 10-year old daughter and myself are named as beneficiaries on his 401k. It's roughly $150k. My stepmom receives $75,000, and the other half is split between myself and my 10-year old daughter.

My question is - would it be smarter to file the chapter 13 and include the inheritance with that? I haven't actually received the money yet.  I don't know how that works. WIll the trustee keep all of the $25k I owe and disburse amongst the creditors automatically? Will they only take a portion of what I owe? I live in Arkansas if that makes a difference. Would my daughter's portion of the inheritance be counted as mine since she's a minor at this time?

Or would it be smarter for me to just keep the money out of my bank account and then negotiate with and pay the creditors myself as the judgements come up? I am attending school right now and live with my boyfriend. The only income I have personally is $300 in child support and about $500 a month as an independent contractor doing some transcribing. I don't own any property, other than a 2018 Fiat, which is worth about $10,000 and I owe about $15,000 on. 

I'm looking forward to hearing your advice. Thank you in advance.

[Shooting-For-800]

If you have not filed, I would negotiate balances or just pay them what you owe or a combo of both.

I would not wait for more judgements.

You should be able to negotiate down to 30%-60% of balances.

Pay the best deals and/or judgements first.

Get everything in writing.  

Open a separate account and ONLY write checks.

NO WIRE Transfers or direct withdrawals!

Assume you will pay 100% in a 13.

its a felony to hide assets in a BK, so don’t entertain that idea.

Sorry for you lost.  Get this debt behind you and enjoy life.

GL!

[Anonymous]

Thank you so much for your response! I plan to follow your advice. Can I ask why you suggest to  a separate account and write only checks? I am just curious. Thanks!

[DebtStinks]

@Shooting-For-800 will likely agree, but it's really just a safeguard for your remaining money. Let's say, for example, you settle a $10,000 account for $4,000 and give them your routing and account #'s for the agreed upon amount of $4,000 to be withdrawn. Most creditors/debt collectors will be completely honest in this scenario, but all it takes is "that one" who's dishonest to withdraw an amount higher than the agreed upon payment/settlement amount...what comes after that is the HE*L trying to get the rest of your money back.

So, as mentioned, use either a separate account where ONLY the money for the payment/settlement is in there or (my preference) would be use a cashier's check from a banking institution other than your own to pay them. Yes, the cashier's check way likely will cost you $1-10 per check but it's IMO worth the peace of mind knowing they don't even have an account number with your name tied to it.

Best of luck in your future and I'm sorry you're going through this hard time, but it will pass.

[Anonymous]

Awesome! Thank you so much. That makes alot of sense.