What can trustee do to 1/9 interest of property I’ll receive?

[Simplicity8!]

Filing for bankruptcy and will receive 10-15% interest of property from a deceased Grandfather. The home is worth $300,000. My debts are $55,000. I wanted to file Chapter 7 but don’t know what affect that would have on my siblings if trustee ended up selling home.

 

[FlyingRon]

The timing on this is crucial. You should discuss this with the attorney you hire to handle your bankruptcy. If the inheritance is not protected by the bankruptcy (which it likely isn't), it's going to be hard for a trustee to do much with a 1/9 share other than lien it so that they recover the potential sale proceeds.

 

[Simplicity8!]

Would trustee only take my share of proceeds not the other siblings? Definitely more concerned that it would affect them

 

[Taxing Matters]

Would trustee only take my share of proceeds not the other siblings? Definitely more concerned that it would affect them

All the trustee can take is your share of the property or your share of the proceeds from the sale of the property. While the trustee could seek an order from the court to sell the property and divide the proceeds with your share going to creditors and the rest going to your siblings, whether that is likely depends on the details of your bankruptcy. It is really important to get advice from a bankruptcy attorney on this.

 

[quincy]

We have a bankruptcy attorney who posts to this forum. You should look for a response from “despritfreya.”

Please keep all of your bankruptcy questions to a single thread. It helps to have all information in one place. Thanks.

 

[quincy]

As a note, you don’t have to have $0 to file for bankruptcy. It is expected that you will need to have money enough for food and housing and other necessities. (https://forum.freeadvice.com/threads/while-trying-to-file-ch7-it-shows-i-have-1000-left-need-to-pay-for-housing-soon.658958/).

 

[Simplicity8!]

Want to qualify for ch7 as I feel chapter 13 I wouldn’t have enough to pay for business expenses and home rent. Right now I’m staying with a friend and they’ve helped me out while opening business. I will have to move out soon. Can I add future rent I need to pay when filing so it doesn’t show as $1000 left to creditors? Last 6 months has shown no home rent paid just business rent/lease payments.

 

[Simplicity8!]

As a note, you don’t have to have $0 to file for bankruptcy. It is expected that you will need to have money enough for food and housing and other necessities. (https://forum.freeadvice.com/threads/while-trying-to-file-ch7-it-shows-i-have-1000-left-need-to-pay-for-housing-soon.658958/).

This is after business expenses food, etc. only thing is last 6 months I didn’t pay for apartment rent but will have to soon in which anything left over I need very much to survive

 

[despritfreya]

Filing for bankruptcy and will receive 10-15% interest of property from a deceased Grandfather. The home is worth $300,000. My debts are $55,000. I wanted to file Chapter 7 but don’t know what affect that would have on my siblings if trustee ended up selling home.

Since you do not indicate the equity in the home I will assume there is no mortgage against it.

After an estimated 7% cost of sale, the net proceeds should be $279,000.00. Your interest is therefore worth approximately $33,480.00 (12%). Unless there is some exemption that will cover your interest the following is what could transpire in the context of a Chapter 7:

1. Trustee sells your interest back to you, one of the siblings or a total stranger - whomever offers the highest and best price; or

2. Trustee hires a broker to market the property in an attempt to sell it pursuant to 11 USC 363(h) (also see subsection 363(j)), if the Trustee can show that this provision applies.

If you elect to file Chapter 7 you have no control over the asset unless there is some exemption that will protect it. Your Trustee controls it.

Des.

 

[zddoodah]

Filing for bankruptcy and will receive 10-15% interest of property from a deceased Grandfather.

I assume this means that your grandfather has died and that his will left you an interest in what I assume is real property (or that you expect to receive this interest by way of the applicable intestate succession law). However, his estate has not yet been fully administered. Correct?

If so, does the will say that the property is to be directly transferred to you and others? Or does it provide for sale of the property and distribution of net proceeds? How many others will receive an interest? Is the property residential, commercial or something else? Are you confident that the estate has sufficient liquid assets to pay estate debt such that the property will not have to be sold to pay estate debt? When do you expect the administration of the estate to be completed?

I wanted to file Chapter 7 but don’t know what affect that would have on my siblings if trustee ended up selling home.

Suffice to say that no one here will know what some unknown bankruptcy trustee in an unidentified state might do based on incomplete facts.

That said, I think it is unlikely that most Ch. 7 trustees would take control of a small percentage interest in a property that is (or soon will be) jointly owned by multiple siblings. This is, of course, something you should discuss with your BK attorney.

Would trustee only take my share of proceeds not the other siblings?

The trustee would have no more entitlement to anything more than your proportionate interest.

 

[Zigner]

Why wouldn't you use the money to pay down/off your debt(s)?

 

[Simplicity8!]

Why wouldn't you use the money to pay down/off your debt(s)?

It has been years since he passed and brother in charge of estate just started cleaning house. I just found out about this a week ago. It could be years before house is sold

 

[Simplicity8!]

Could I sell my portion 1/9 back to brother or rest of beneficiaries?

 

[LdiJ]

Why wouldn't you use the money to pay down/off your debt(s)?

He might very well be able to negotiate enough of the debts down that he could entirely avoid bankruptcy if he used the inheritance to pay debts. Credit card companies are certainly willing to negotiate.

 

[Simplicity8!]

I assume this means that your grandfather has died and that his will left you an interest in what I assume is real property (or that you expect to receive this interest by way of the applicable intestate succession law). However, his estate has not yet been fully administered. Correct?

yes not been distributed. House hasn’t be

If so, does the will say that the property is to be directly transferred to you and others? Or does it provide for sale of the property and distribution of net proceeds? How many others will receive an interest? Is the property residential, commercial or something else? Are you confident that the estate has sufficient liquid assets to pay estate debt such that the property will not have to be sold to pay estate debt? When do you expect the administration of the estate to be completed?

not sure yet the exact terms, will be split between 9 people I believe. I do not have any assets to cover debts. Since brother took this long it is uncertain when it would even be listed. It is in Oregon the house. I live in CA. House may be worth $250-300,000? I owe $45,000 debt.



Suffice to say that no one here will know what some unknown bankruptcy trustee in an unidentified state might do based on incomplete facts.

That said, I think it is unlikely that most Ch. 7 trustees would take control of a small percentage interest in a property that is (or soon will be) jointly owned by multiple siblings. This is, of course, something you should discuss with your BK attorney.




The trustee would have no more entitlement to anything more than your proportionate interest.