My question involves bankruptcy in the state of: Mississippi
My brother is in the process of filing Chp 13 bankruptcy. He owes my Mom for a $45K promissory note that was placed in her irrevocable trust, both of which were created in March 2014. I am trustee for the trust. Years ago, my Mom loaned him money by getting her own loan in her name and using her land as collateral. There was no note that he signed since it was her loan and her land used as collateral. She just paid off her loan in February and he signed the promisory note in March that was placed in the trust.
The trust states that my brother is entitled to his share of the land AFTER the loan is paid in full. Any balance outstanding at the time of her death is reduced from his inheritance.
I don't know anything about bankruptcy, but assuming the $45K note is forgiven by the judge:
- Do the terms of the trust still apply meaning does the outstanding loan reduce his inheritance?
- What can I do as trustee to carry out my Mom's wishes? Options?
- He has verbally promised to continue payments, but I don't think that will be legally binding since he can not re-affirm the debt . How can my Mom be creative to avoid this problem?
Thanks.