Legal Question in Bankruptcy in California

I loaned someone $30K. Standard fixed interest notorized promissory note. Person stopped paying in April, and is currently in default for 22K. He is planning to file bankruptcy. Does not own a home, has no income (turned out to be a deadbeat) HOWEVER he is the co-trustee and co-beneficiary of a Family Trust worth about $480K at this time. No spendthrift clause. The trust ripens upon the death of his now 94 year old mother who is in a nursing home. Can that trust be considered an asset, and can I collect upon the death of the mother? I just don't want to chase good money after bad if there is no chance for me to collect.


Asked on 10/04/09, 11:10 am

2 Answers from Attorneys
OCEAN BEACH ASSOCIATES OCEAN BEACH ASSOCIATES

You need to get a judgment first, then take the debtor in for an asset exam periodically or after the trust is distributed. Perhaps he will make an assignment to you for the amount of the judgment from his trust proceeds. Contact me directly.

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Answered on 10/04/09, 3:14 pm
Brian Whitaker Lifeline Legal, LLP

If he files BK, his debt to you will be discharged, whether you have a judgment or not.

But if his mother dies within six months of his BK filing date, you will eventually be paid because the BK Trustee will be entitled to those proceeds for the benefit of creditors. Your job will be to make sure that (1) you are scheduled as a creditor, and (2) the Trustee learns of the mother's death.

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Answered on 10/05/09, 2:08 am


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