Filing for bankruptcy is a complicated process itself, as it involves many aspects of your financial situation. But sometimes unexpected things occur such as receiving inheritance. If just filed applied for bankruptcy, you might be thinking how much, if any, you’re entitled to keep. The outcome of the situation you are in depends on numerous factors, such as when you inherited the assets and which bankruptcy chapter you submitted. Getting an inheritance throughout personal bankruptcy is a little uncommon, yet working together with an experienced personal bankruptcy lawyer you can help you avoid major interruptions to your case.
The 180 Day Rule
The bankruptcy court sticks to a “180 Day Rule.” If you obtained an inheritance within 180 days of declaring bankruptcy, it’s most likely that the assets will be divided and taken by the court, partly or completely. If more than 180 days have passed since your filing, everything depends on the bankruptcy chapter and you even you may have a chance to keep everything.
In this case, the days are counted since the day a testator passed away. It doesn’t matter if you receive the inheritance 2 days after or 2 years later on, the court will only check out the date of death.
When you apply for Chapter 7 bankruptcy, your assets are liquidated by your trustee and the obtained funds then used to repay debts. A few of your debts will be discharged and the rest will be paid off, leaving you essentially debt-free after.
Under Chapter 7 it is possible to keep some of your assets as bankruptcy court allows a certain number of Exemptions, such as your property (for example, house) or car. Unfortunately, this doesn’t automatically apply to your inheritance. Whether you’ve got a house, some amount of money or other personal items like jewelry from your relative member, your inheritance could become part of your bankruptcy estate if you have actually acquired it within 180 days of declaring. If some or all of what you inherited can be considered exempt, you will likely get to keep it.
In a Chapter 13 bankruptcy, the court deals with you to set up a cost effective settlement plan, so you could keep your properties and have them repaid three to five years after you filed. Exactly what you partly depends on the value of your nonexempt residential property. If your inheritance is nonexempt it will certainly be added to your various other nonexempt residential or commercial property, which might increase its value. Your trustee may decide to file a new repayment strategy, which would certainly raise the quantity you pay to financial institutions.
What If I Hide My Inheritance?
It can be very distressing to discover that you have actually inherited something from a person that was close to you, just to have the court take it away. While you may be naturally upset, it’s important to remember that you must be totally honest as well as not to hide any of your financial debts and also assets from the court. Your trustee will certainly examine your papers carefully and will question any kind of inaccuracies. If the court discovers that you attempted to conceal an inheritance, you can be hit with penalties or have your case thrown out. Your trustee might also choose to transform your case over to the FBI as well as have you accused of fraudulence, which could lead to hefty fines or jail time.
Get In Touch With a Dalton Personal Bankruptcy Lawyer
If you have actually received an inheritance during bankruptcy, the initial step you ought to do is call your bankruptcy attorney and also reveal all assets you’ve acquired. Your lawyer could evaluate your list to determine which things might be exempt and also which might be liquidated or contributed to your nonexempt property. The bankruptcy attorney Jack Setters has years of experience dealing with all types of bankruptcy cases.
Please, tell us about your situation so we could walk you through the process and answer all your questions. Call us today for a free consultation.