If a trustee fails to follow the trust as written, you may be able to take legal action against them if you have legal standing to do so. To sue a trustee, you must be an “interested party” which is usually a named beneficiary of the trust.
Chapter 13 – See Bankruptcy Code Section 1307 – A debtor has a right to dismiss its Chapter 13 bankruptcy case if the bankruptcy began as a Chapter 13 case, but the court may place restrictions on a debtor's ability to file a subsequent bankruptcy case.
To begin, trustees are not personally responsible for the debts of a trust such as a mortgage on a trust property, outstanding loan from a promissory note or even medical and utility bills. You, as trustee, do not have to pay these bills personally.
In Chapter 13 bankruptcy cases, you can't finish your Chapter 13 plan early unless you pay creditors in full, qualify for a hardship discharge, convert to Chapter 7 bankruptcy, or dismiss the case.
The Chapter 13 Trustee is required to report to the Bankruptcy Court if you fail to make payments on time or in full. The Court may then enter an order dismissing your case and withdrawing the protection of the Bankruptcy Court. If that occurs, you then could be subject to creditor collection efforts and other actions.
A Chapter 13 petition for bankruptcy will likely necessitate a $500 to $600 monthly payment, especially for debtors paying at least one automobile through the payment plan. However, since the bankruptcy court will consider a large number of factors, this estimate could vary greatly.
Ultimately, trustees can only withdraw money from a trust account for specific expenses within certain limitations. Their duties require them to comply with the grantor's wishes. If they breach their fiduciary duties, they will be removed as the trustee and face a surcharge for compensatory damages.
Medical debt and hospital bills don't simply go away after death. In most states, they take priority in the probate process, meaning they usually are paid first, by selling off assets if need be.
Trustees are personally liable for all decisions they take in that capacity, and their liability is not automatically limited to the value of the trust fund.
An individual cannot file under chapter 13 or any other chapter if, during the preceding 180 days, a prior bankruptcy petition was dismissed due to the debtor's willful failure to appear before the court or comply with orders of the court or was voluntarily dismissed after creditors sought relief from the bankruptcy ...
Many Chapter 13 Bankruptcies Fail
And that's due in large part to the fact that Chapter 7 cases are much simpler and quicker. The main reason so many Chapter 13 cases fail is that it's difficult to stick to the required 3–5-year repayment plan. Most payment plans under Chapter 13 are five years long.
After you have filed a petition for bankruptcy, the court will put an automatic stay in effort. The automatic stay will inform your creditors that they are no longer permitted to contact you about your debts.
If the trustee is not paying beneficiaries accurately or on time, legal action can be taken against them.
In general, the steps to this process are: The trustee must send a written notice to the beneficiary to vacate the real property. Under California law, if the beneficiary has been in possession of the property for less than a year, then a 30-day notice is sufficient.
Under California law, embezzling trust funds or property valued at $950 or less is a misdemeanor offense and is punishable by up to 6 months in county jail. If a trustee embezzles more than $950 from the trust, they can be charged with felony embezzlement, which carries a sentence of up to 3 years in jail.
If you contact the bank before consulting an attorney, you risk account freezes, which could severely delay auto-payments and direct deposits and most importantly mortgage payments. You should call Social Security right away to tell them about the death of your loved one.
Perhaps the most common debts that cannot be discharged under any circumstances are child support, back taxes, and alimony. Here are some of the most common categories of non-dischargeable debt: Debts that you left off your bankruptcy petition, unless the creditor had knowledge of your filing. Many types of taxes.
When a loved one passes away, you'll have a lot to take care of, including their finances. It's important to remember that credit card debt does not automatically go away when someone dies. It must be paid by the estate or the co-signers on the account.
Yes, a trustee can go to jail for stealing from a trust, if they are convicted of a criminal offense. In California, embezzling trust assets worth $950 or less is a misdemeanor crime that can be punished with up to a 6-month sentence in county jail.
The short answer is that they can withdraw money as needed to cover legitimate trust expenses. When naming a trustee, it's important to choose an individual or entity, such as a bank or wealth management firm, that you can rely on to abide by their fiduciary duty.
A trustee must abide by the trust document and the California Probate Code. They are prohibited from using trust assets for personal gain and must act in the best interest of the beneficiaries. Trust assets are meant for the benefit of the trust beneficiaries and not for the personal use of the trustee.
Communication with the Court
If you can't make your Chapter 13 payment, it's essential to communicate with your attorney and the court. Your attorney can help you contact the trustee to discuss the situation. By being proactive, you can show the court that you are trying to work towards a solution.
Bankruptcy costs include: Court filing fees: $338 for Chapter 7 (may be waived for eligible filers) or $313 for Chapter 13. Credit counseling course fees, which can range from $10–$50 per course (may be waived for eligible filers)
No Income Limits for Chapter 13 Bankruptcy
If you don't pass the means test, you might qualify to reorganize your debt under Chapter 13 bankruptcy (or Chapter 11 bankruptcy if your expenses exceed the allowed amounts). In Chapter 13, you'll pay into a three- to five-year repayment plan.