Expert: Mark J. Markus- California Bankruptcy Attorney - 12/27/2008

Question
I had my chapter 7 341 meeting in November and I am 32 days into my 60 day waiting period for discharge.  The trustee has already filed a no asset case.  Almost two years ago I joined in a class action lawsuit with several other homebuilders in my housing tract for structural damage problems.

I completely forgot about this when filling out all my forms.  I just received a letter from the class action attorney saying the case has settled in mediation and I should be receiving $3500 - $4500 in about 100 days.  

I want to let the trustee know and they can decide if they want the  money.  My fear is will doing an amendment adding the asset cause red flags with the case trustee or US trustee?  Is this something that happens all the time or is this a severe no-no?  I don't want to delay my discharge or raise any red flags.  I am just trying to be honest and letting them know.  I also don't want to hide anything and not file an amendment.

Answer
As long as you inadvertently failed to originally list it, I think filing an amendment is the smartest thing to do, especially if you have exemptions remaining that can protect all or part of the settlement proceeds.  At this point, the best thing to do is be as forthright as possible.