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Chapter 7 BK discharged then rescinded by trustee
Dennis:
I understand that it captures the inheritance, but what there is to inherit is my point. The trustee only stands in the shoes of the debtor. The factors I raised determine whether there is an inheritance for the debtor/bk estate (litigation, state law, etc), whether it can be reached by the trustee (541(c)(2)), and what the dollar value of the inheritance will be (the debtors percentage the net distributable value of the probate estate).
To state it another way. Someone died, there gross estate goes in one end of the probate pipeline, it is eaten up by atty fees, taxes, miscellaneous administrative fees and the decedents creditor. After all those deductions are made, the net estate comes out of the other end of the pipeline, where those who are entitled to inherit under the will or by intestate succession then get their share of the net probate estate. It is at this point that the bankruptcy trustee gets in line in the place of the debtor and receives the debtors share.
If you have any questions or concerns, please contact me.
Pat
Patrick T. Green, Esq.
Fitzgerald & Green
Attorneys at Law
1010 E. Union Street
Suite 206
Pasadena, CA 91106
Tel: 626-449-8433
Fax: 626-449-0565
pat@fitzgreenlaw.com
The post was migrated from Yahoo.
Hi all,
In today's BK Ethics Symposium materials, it states that with respect to
spendthrift trusts, a bankruptcy estate possesses an income interest in 1/4
of the payments due per In re Neuton, 922 F2d 1379. Also see, Cal. Prob.
Code Sections 15301-15307.
Happy Holidays,
On Fri, Dec 18, 2009 at 10:14 PM, Dennis McGoldrick wrote:
>
>
> Pat,
> sorry, I give a lot of credit to your opinion, but this misses the point.
> The 180 day rule will capture this inheritance just because the death was
> within 180 days. Doesn't matter that it takes longer to settle the claims.
>
> dennis
>
> --- On *Fri, 12/18/09, Patrick Green * wrote:
>
>
>
> Subject: RE: [cdcbaa] Chapter 7 BK discharged then rescinded by trustee
> To: cdcbaa@yahoogroups.com
> Date: Friday, December 18, 2009, 3:47 PM
>
>
>
>
> Until the litigation is concluded, debtors inheritance is only an
> expectancy. In addition, if she does have an interest in the estate, the
> creditors of the estate will get their bites first. The bk trustee cannot
> get anything until those issues are settled. After all is said and done and
> the estate is ready for distribution, if she is still entitled to something,
> then the issues of spendthrift provisions in a trust, including a
> testamentary trust, will come into play. Those issues would be controlled
> by the law of the state in which trust is situated or in the state that the
> trust documents choice of law provision indicates.
>
>
>
> Client and bk trustee have a long way to go before either can get anything.
>
>
>
> If you have any questions or concerns, please contact me.
>
>
>
> Pat
>
>
>
> Patrick T. Green, Esq.
>
> Fitzgerald & Green
>
> Attorneys at Law
>
> 1010 E. Union Street
>
> Suite 206
>
> Pasadena, CA 91106
>
> Tel: 626-449-8433
>
> Fax: 626-449-0565
>
> pat@fitzgreenlaw. com
>
>
>
>
>
> *From:* cdcbaa@yahoogroups. com [mailto:cdcbaa@ yahoogroups. com] *On
> Behalf Of *Dennis McGoldrick
> *Sent:* Thursday, December 17, 2009 1:53 PM
> *To:* cdcbaa@yahoogroups. com
> *Subject:* RE: [cdcbaa] Chapter 7 BK discharged then rescinded by trustee
>
>
>
>
>
> Lindsay,
>
>
>
> Steve raises a good point. If there is a trust, may be an antialienation
> provision or some other protection.
>
>
>
> dennis
>
> --- On *Thu, 12/17/09, Steven B. Lever * wrote:
>
>
> Subject: RE: [cdcbaa] Chapter 7 BK discharged then rescinded by trustee
> To: cdcbaa@yahoogroups. com
> Date: Thursday, December 17, 2009, 1:37 PM
>
>
>
> Is the inheritance pursuant to a will or a trust? If a trust there are
> further inquiries that may yield a different result. If it in a will or
> intestate, then I concur with the analysis below. If in a trust you will
> need a copy of the trust to analyze whether it is in the estate or not.
>
>
>
> *From:* cdcbaa@yahoogroups. com [mailto:cdcbaa@ yahoogroups. com] *On
> Behalf Of *Dennis McGoldrick
> *Sent:* Thursday, December 17, 2009 1:22 PM
> *To:* cdcbaa@yahoogroups. com
> *Subject:* Re: [cdcbaa] Chapter 7 BK discharged then rescinded by trustee
>
>
>
>
>
> Lindsey:
>
>
>
> Sorry, facts bad. If the death was within 180 days of filing, the
> inheritance goes to estate.
>
> Litigation over amount will just limit the amount which goes to the estate.
>
>
>
> dennis
>
> --- On *Thu, 12/17/09, Lindsey Green * wrote:
>
>
> Subject: [cdcbaa] Chapter 7 BK discharged then rescinded by trustee
> To: cdcbaa@yahoogroups. com
> Date: Thursday, December 17, 2009, 10:55 AM
>
>
>
> Listmates,
>
>
>
> Facts: Client files a Chapter 7 BK 6/09, which is a no assets case. The
> Chapter 7 BK is discharged 10/1/09. Debtor father dies 12/5/09 and
> debtor may inherit significant funds. Trustee tells debtor that the
> discharge has been *rescinded* due to a clerical error. The trustee sues
> to get the debtor's inheritance to pay creditors. However, the inheritance
> she MAY get is currently in litigation in another state to determine if she
> has any interest; family is fighting her right to the inheritance.
>
>
>
> 1. If her potential inheritance ($400,000) is STILL in litigation in
> another state, can the trustee now go after these funds?
>
>
>
> 2. What is the effect of a Chapter 7, no asset case being discharged and
> then the discharge is rescinded by trustee due to a clerical error? Is this
> valid? It appears that the trustee found out about the inheritance.
>
>
>
> 3. What is the inheritance rule code section? Does trustee have 6
> months from the date of filing the Chapter 7 BK to go after the inheritance?
>
>
>
> 4. What are the debtor's rights?
>
>
>
> Thanks!
>
>
>
> Lindsey Green, Esq.
>
> Gumm & Green
>
>
>
>
>
>
>
>
>
>
>
>
Daniela P. Romero
Law Office of Daniela Romero, APLC
1015 N. Lake Ave., Ste. 115
Pasadena, CA 91104
Telephone:626-817-2611
Facsimile: 626-628-1781
email: dromerolaw@gmail.com
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Hi all, In today's BK Ethics Symposium materials, it states that with respect to spendthrift trusts, a bankruptcy estate possesses an income interest in 1/4 of the payments due per In re Neuton, 922 F2d 1379. Also see, Cal. Prob. Code Sections 15301-15307.
Happy Holidays,On Fri, Dec 18, 2009 at 10:14 PM, Dennis McGoldrick <easky1@yahoo.com> wrote:
Pat, sorry, I give a lot of credit to your opinion, but this misses the point. The 180 day rule will capture this inheritance just because the death was within 180 days. Doesn't matter that it takes longer to settle the claims.
dennis--- On Fri, 12/18/09, Patrick Green <pat@fitzgreenlaw.com> wrote:
[cdcbaa] Chapter 7 BK discharged then rescinded by trusteeTo: n.com>
Subject: [cdcbaa] Chapter 7 BK discharged then rescinded by trustee
To: cdcbaa@yahoogroups. com
Date: Thursday, December 17, 2009, 10:55 AM
Listmates,
Facts: Client files a Chapter 7
BK 6/09, which is a no assets case.The Chapter 7 BK
is discharged 10/1/09.Debtor father dies 12/5/09 and
debtormay inherit significant funds.Trustee tellsdebtor
that the discharge has been rescinded due to a clerical
error. The trustee sues to getthe debtor's inheritance to pay
creditors. However, the inheritance sheMAY get is currently in
litigation in another state to determine if she has any interest; family is
fighting her right to the inheritance.
1. If her potential
inheritance ($400,000) isSTILL in litigation in another state, can
the trustee now go after these funds?
2. What is the
effect of a Chapter 7, no asset case being discharged and then the
discharge is rescinded by trustee due to a clerical error? Is this
valid? It appears that the trustee found out about the inheritance.
3. What is the
inheritance rule code section? Does trustee have 6 months from the
date of filing the Chapter 7 BK to go after the inheritance?
4. What are the
debtor's rights?
Thanks!
Lindsey Green, Esq.
Gumm & Green
The post was migrated from Yahoo.
Until the litigation is concluded, debtors inheritance the estate, the creditors of the estate will get their bites first. The bk trustee cannot get anything until those issues are settled. After all is said and done and the estate is ready for distribution, if she is still entitled to something, then the issues of spendthrift provisions in a trust, including a testamentary trust, will come into play. Those issues would be controlled by the law of the state in which trust is situated or in the state that the trust documents choice of law provision indicates.
Client and bk trustee have a long way to go before either can get anything.
If you have any questions or concerns, please contact me.
Pat
Patrick T. Green, Esq.
Fitzgerald & Green
Attorneys at Law
1010 E. Union Street
Suite 206
Pasadena, CA 91106
Tel: 626-449-8433
Fax: 626-449-0565
pat@fitzgreenlaw.com
The post was migrated from Yahoo.
As to 1. If there is a trust, get a copy of the trust and look for a
spendthrift clause. If you have a spendthrift clause then the inheritance
should be protected by 541(c)(2). I always put a spendthrift clause in my
clients trusts. If the estate is passing by a Will then the property
passes on the date of death.
Larry Webb
email Larry@Webbklaw.com
Law Office of Larry Webb
484 Mobil Ave. Suite 43
Camarillo California 93010
805 987 1400
Fax 805 987 2866
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charset="windows-1251"
1. yes.
2. no impact, case can be reopened without problem, particularly to deal
with this situation
3. See 541(a)(5)
4. convert to another chapter (likely), move for dismissal (unlikely)
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal
Specialization.
Lindsey Green
Sent: Thursday, December 17, 2009 10:55 AM
To: cdcbaa@yahoogroups.com
Subject: [cdcbaa] Chapter 7 BK discharged then rescinded by trustee
Listmates,
Facts: Client files a Chapter 7 BK 6/09, which is a no assets case. The
Chapter 7 BK is discharged 10/1/09. Debtor father dies 12/5/09 and debtor
may inherit significant funds. Trustee tells debtor that the discharge has
been rescinded due to a clerical error. The trustee sues to get the
debtor's inheritance to pay creditors. However, the inheritance she MAY get
is currently in litigation in another state to determine if she has any
interest; family is fighting her right to the inheritance.
1. If her potential inheritance ($400,000) is STILL in litigation in
another state, can the trustee now go after these funds?
2. What is the effect of a Chapter 7, no asset case being discharged and
then the discharge is rescinded by trustee due to a clerical error? Is this
valid? It appears that the trustee found out about the inheritance.
3. What is the inheritance rule code section? Does trustee have 6 months
from the date of filing the Chapter 7 BK to go after the inheritance?
4. What are the debtor's rights?
Thanks!
Lindsey Green, Esq.
Gumm & Green
charset="windows-1251"
Message
1.
yes.
2. no impact, case
can be reopened without problem, particularly to deal with this
situation
3. See
541(a)(5)
4. convert to another
chapter (likely), move for dismissal (unlikely)
David A.
Tilem
Certified Bankruptcy
Specialist*
The post was migrated from Yahoo.
I should add that the filing of no asset report does not have any bearing on
whether or not an estate asset is abandoned (the case on point is In re
Smith around 1991). Assets only abandoned upon motion and order or closing
of case.
_____
The post was migrated from Yahoo.