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Being a beneficiary on an Irrevocable Estate Trust & filing Bankruptcy Chapter 7

Elmhurst, NY |

Should I give up being a beneficiary before filing bankruptcy chapter 7? What do I need to know & what to expect from the creditors?

Attorney Answers 3

Posted

You can do whatever you want, but appreciate that you may be violating the terms of the Uniform Fraudulent Transfers Act, a criminal law, if you give up property rights in order to avoid paying creditors. Filing bankruptcy puts you in the spotlight for an investigation of your financial transactions, so I would be consulting with a bankruptcy attorney that can assist your in planning for bankruptcy & who understands asset protection requirements. Hope this perspective helps!

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Posted

My attorney told me I should file chapter 13. I am thinking credit consolidated or debt settlement since I can repair my credit faster. With chapter 13, I have to pay attorney fees plus 100% to all creditors, it is very difficult for me.

Posted

You will have to disclose your beneficiary status in your bankruptcy. There are timelines that come into play as well as the language of the trust itself. You may be making a big mistake if you don't check with your bankruptcy counsel before doing anything like this. If you don't have an attorney you can easily find one in your area on Avvo.
Good Luck

This answer does not create and attorney-client relationship. You can only create that relationship by meeting with Mr. Holt and signing a retainer agreement.

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Posted

I agree with Mr. Holt. You would still need to disclose and see if this is something the trustee will overlook or want to delve into. The factors around your interest in the trust will control.

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