I have mounds of credit card debt and have been seriously considering filing bankruptcy for several months and decided that this would be the year I wanted to do it. Please keep in mind, this is not a proud moment in my life and this is a last resort for me to leave my past in the past and start fresh.
Anyway, in my research, I found that if you become eligible to an "inheritance" within 180 days of filing, they will take that money and apply it toward your debt. This money that my grandmother left me, which is about $10,000, is in a mutual fund. When I found out I was entitled to it a few weeks ago, my first thought was that I wanted to transfer it to an account for my daughter, in my daughter's name, for her. (Obviously I realize I would also have to be on the account since she's a minor)
My main question is, if I put this money in an account for her, will they/can they still take it? It's not much but it's all I have to put away for her and I want it for her. Of course I will be calling a local bankruptcy lawyer this week but I wanted to see if there was anyone else who had been in a similar situation.
Any info on this would be greatly appreciated. Thanks in advance. :)
How behind are you in the cc payments? I am guessing you are fairly behind since you are considering bankruptcy. If not, however, and you've been trying to make the payments, the answer your question the answer is NO they cannot take your inheritance and apply it towards your debt. I believe you would have to first prove that you have been trying to make the payments or pay as much as you can, and if you have there is no way they can come after that money. If you are really behind for say, months, and have been avoiding debt-collectors, that's another thing. And I don't have an answer there... it all depends on how much debt and how much of it you are able to pay at this time. If you can, try debt consolidation first; they will work with you and the creditors, and will help come up with a payment plan. I hope something like that works for you AND you can keep that inheritance money, as you should.
If you have a job, there must be an alternative to bankruptcy. You haven't said how much you owe or how much you make, but I would discuss this with a company that helps negotiate on your behalf and try not to file bankruptcy if at all possible.
If you want to share additional details, that would be helpful in offering more detailed recommendations.
You would not have to be on a Series EE or Series I* government savings bond(s) that you can purchase for your daughter (but someone should be co-owner or POD - payable on death). But then you need to wait 181 days - - although I agree with the others that bankruptcy may not be the best choice. {You do not start fresh after bankruptcy. Many limitations will be placed on you for many years.}
* probably the better choice.
I suspect the BK court will take a very dim view of you attempting to transfer this money to your daughter while you expect the court to erase your debts.
Talk to your attorney before you do something you might regret later.
Do the right thing and pay off your debts....or at least as much as you can.
dr
