Chapter 13 question

[usound76]

What is the name of your state (only U.S. law)? Kentucky

I am currently in a chapter 13 and want to set up a special needs trust for my daughter. My parents are more than willing to lend me the money to set it up. Do I still need permission from the trustee since it's from my parents?

 

[latigo]

What is the name of your state (only U.S. law)? Kentucky

I am currently in a chapter 13 and want to set up a special needs trust for my daughter. My parents are more than willing to lend me the money to set it up. Do I still need permission from the trustee since it's from my parents?

As a debtor in bankruptcy you should know that you cannot incur post petition debts without the prior approval of the trustee and/or the bankruptcy court. And generally only for emergency needs.

But why trouble the trustee?

If the grandparents are providing the trust corpus, why do you need to get into the mix? Why can’t they "set it up" instead of you?

And why aren't you asking your bankruptcy attorney?

 

[usound76]

When I originally posted the question, my attorney was on vacation.

I know that I cannot incur additional debts, but wasn't sure if my parents giving me the money constituted a "debt".

My parents live out of state and were just going to mail me a check. Instead, I had them mail the check directly to the estate planning attorney.

 

[Zigner]

When I originally posted the question, my attorney was on vacation.

I know that I cannot incur additional debts, but wasn't sure if my parents giving me the money constituted a "debt".

My parents live out of state and were just going to mail me a check. Instead, I had them mail the check directly to the estate planning attorney.

Your original question mentioned your parents lending you the money. The response you got was based on that.

 

[usound76]

I realize that now that I've re-read my original post, sorry. My parents told me "if you can pay us back eventually, fine: if you can't, consider it a gift". When I reminded them of the 13, she said "then I guess it's a gift".