Can I stop a foreclosure by filing bankruptcy even if I have $100,000 in a trust that my husband left me?
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Can I stop a foreclosure by filing bankruptcy even if I have $100,000 in a trust that my husband left me?
My husband passed away last year and left me $100,000 on life insurance. I have not used that money yet. My house is set for foreclosure in three days and I want to stop it by filing bankruptcy. Is it possible to file bankruptcy to stop a foreclosure even if I have the $100,000 in a trust right now?
Asked on August 7, 2012 under Bankruptcy Law, Florida
Answers:
MD, Member, California Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
You can try to file a bankruptcy but if you have that much in liquid assets it could be considered a fraud on the court if you are filing for Chapter 7 bankruptcy. Before you do anything, consider talking to your lender about halting the foreclosure while you apply for a modification of some sort or something under HAFA (alternatives likes short sales). This way, you can get rid of the home and still have your $100,000.00. Talk to a bankruptcy attorney if you are concerned about the next steps.
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