Inheritance and Bankruptcy Law

Columbus Bankruptcy Lawyers

Bankruptcy process requires debtor to declare all income including inheritance. Any land, money, assets that debtor receives must be disclosed during bankruptcy process to trustee of bankruptcy court. Most of the time inheritance is a windfall. It could be a head ache or a help depending on type of bankruptcy filed by debtor and financial situation of debtor.

Inheritance is considered as income however it is received whether in cash or as assets. Inheritance received by debtor definitely has an affect of bankruptcy plan since there is a change in your income status from when bankruptcy was filed. Anything that is inherited within three months or 180 days after filing for a chapter 7 bankruptcy is affected. Even if you receive the inheritance during course of your repayment plans through a chapter 13 bankruptcy, there would be an affect.

Inheritance and Chapter 7 Bankruptcy

 All inherited assets and money is under the control of court appointed trustee who oversees the bankruptcy process. Since chapter 7 involves liquidation of assets to pay off creditors, inheritance would naturally be liquidated and used in repayment of eligible debts.

Inheritance and Chapter 13 Bankruptcy

Chapter 13 bankruptcy involves a repayment plan which is supervised by court and extends over a time period of three to five years. Assets or money that comes as an inheritance to the debtor in these five years automatically come sunder control of court appointed trustee for supervision. The inheritance is classified as income and is used to pay off secured debts that were not initially included in the bankruptcy repayment plan.

Sometimes the inheritance changes total value of debtor’s assets and this could be more than permissible federal limit for filing bankruptcy. Apart from this, if inheritance is received by either spouse it will be included as income and be used in income calculation of states irrespective of who among the spouses have filed for bankruptcy. The date of receiving inheritance holds no value in a bankruptcy. The important date is when officially you receive assets or money. Since normally, after reading of will, it takes more than a year for money to reach the person but if the will is read within six moths of your filing of bankruptcy, it can be considered as income.

Bankruptcy ensures that inheritance received by you or your spouse is used in repayment of your debts which would be the normal course even you would adopt if you had received it before filing for bankruptcy. Your bankruptcy attorney would be able to provide valuable advice regarding the eligibility to file for bankruptcy after receiving inheritance as also advice regarding bankruptcy process in general and help with filing and provide representation.

If you are searching for Columbus GA bankruptcy attorney or interested in Chapter 7 or Chapter 13 even need a Bankruptcy lawyer, then we can help.

Our Chapter 7 - Chapter 13 bankruptcy attorneys handle debt relief situations around Columbus, Chattahoochee County, Harris County, Marion County and Muscogee County.