Considering bankruptcy? Do you believe that you will be receiving an inheritance? If so, there are important things to consider. Bankruptcy can be complicated. So, it is important to speak with an attorney about what will work best for you.
In the event you become entitled to an inheritance within your bankruptcy filing, you will need to notify your attorney and the trustee. The inheritance may be seized to repay your creditors. There is a difference between receiving an inheritance and being entitled to one. This is why timing is everything.
Inheritance
While it is possible to lose an inheritance during bankruptcy, it is also possible to protect it under your state and federal exemptions. Has your inheritance been received within 180 days of your filing? If so, the trustee in your bankruptcy case can seize it to repay your creditors. This timing will be based on the date of death of the person leaving you the inheritance. If you have already received your inheritance before filing bankruptcy, you will need to notify your attorney immediately.
Do the Rules Change for Chapter 13 and Chapter 7?
Under a Chapter 7, the trustee in your case typically is unable to take your inheritance after the 180 day bankruptcy filing date. On the other hand, in a Chapter 13, your inheritance may have an effect on the amount needed to repay your creditors in your plan payments. Every case is different, so you will need to speak with your attorney to understand how your case will be affected.
Remember, if you receive an inheritance and do not tell your attorney and trustee, this will be considered bankruptcy fraud. This will likely result in the dismissal of your case without a discharge of your debts. Also, it can even lead to criminal fraud charges. Make sure you speak with a qualified bankruptcy attorney to let you know what options are best for you.
Need More Information?
Please note that there are many other situations to be mindful of when filing bankruptcy. Therefore, we recommend meeting with a professional bankruptcy attorney to discuss your personal situation in detail. Our office prides itself on offering honest and detailed information. Call us today to set up a free consultation.