Chapter 13 question on funds received

[rylos]

I have a question please.

I am about 5 months into a chapter 13 (thank God for the help!!) and during my court dates and the paper work i had to advise the trustees of a possible work comp claim (maybe i messed up but was trying to be honest). Well during the hearing or meeting with the trustee he just told me if i received any money from my claim to tell me attorney and he would know what to do with it.

Well if i receive any type of a cash settlement how do they know or how do they find out?

If i kept the cash without turning it in and they found out what normally happens?

Its not i am wanting to totally scam the system. I just want to get ahead of the bills and have a little buffer if things go bad! (vehicle repairs, repairs to house, etc etc)

Thanks for the help!

[Methuss]

I have a question please.

Well if i receive any type of a cash settlement how do they know or how do they find out?

If i kept the cash without turning it in and they found out what normally happens?

If you receive any amount over $600 then a form gets filed with the IRS for the income, regardless of if it is taxable.

If the trustee finds out you have hidden funds from the bankruptcy estate, you could be penalized. It could be as minor as the trustee seizing the funds (and yes they can undo any transaction you do with the funds) or as extreme as asking the judge to dismiss your case entirely with no discharge.

Don't mess with this. If you get any substantial sum, report it to your attorney so a determination can be made on if you must turn it over to the trustee. Some settlements are exempt so you may not have to turn it over, but it is up to your BK lawyer to make that determination.