Can the bankruptcy courts take my inheritance in a chapter 13 bankruptcy? - Bankruptcy Law Questions and Answers- LawQA.com

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Can the bankruptcy courts take my inheritance in a chapter 13 bankruptcy?

Can the bankruptcy courts take my inheritance chapter 13? I am about to start my final year of a 5 year plan and I am about to receive money from a revocable living trust. Do I have to report it? Will they take it all or just increase my monthly payments to trustee?

Answer By Kevin Heupel
Heupel Law
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Yes, it needs to be reported. The outcome depends on the type of property. Contact your attorney so you get good advice before doing anything.

Answer Applies to: Colorado
Replied: 1/9/2012

The Law Offices of Seth D. Schraier
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The effect of an inheritance while you are in bankruptcy depends on timing. If you inherit within 180 days of the date your petition is filed, that inheritance will become property of your bankruptcy estate. You will be required to bring that matter to the attention of the court and your trustee by amending the paperwork filed with the court to disclose the inheritance.It does not matter that you might not actually receive anything for months or years. The key date is when your loved one passed away. In a Chapter 13, the value of the inheritance will be used to determine, in part, how much you must pay into a Chapter 13 plan in order to be fair to your creditors. If the inheritance is received after that initial 180 day period, the effect is different. If you are in a Chapter 13 case, however, it may still be property of your bankruptcy estate. In addition, your Chapter 13 trustee may also contend that good faith requires devoting any excess funds or property to the plan.

Answer Applies to: New York
Replied: 1/8/2012


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It depends on the nature of the asset. Yes, you are required to disclose any inheritance.

Answer Applies to: Florida
Replied: 1/7/2012

Answer By Darren Aronow
The Law Office of Darren Aronow, PC
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If you had a 100% plan, then probably not. However, if you had anything less than 100%, then the trustee will look to take that money and give it to the creditors.

Answer Applies to: New York
Replied: 1/7/2012

Answer By Eric Lewis
Indianapolis Bankruptcy Law Office of Eric C. Lewis
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Read your Chapter 13 plan as confirmed. It holds the answer.

Answer Applies to: Indiana
Replied: 1/6/2012

Bankruptcy Law office of Bill Rubendall
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An inheritance becomes propety of the bankruptcy estate if it is received within 180 days of the petition.

Answer Applies to: California
Replied: 1/6/2012

Judith A. Runyon, Esq. Attorney at Law
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It depends upon how much your plan is providing to unsecured creditors. Talk to your bankruptcy attorney.

Answer Applies to: California
Replied: 1/6/2012

Answer By Larry Webb
Law Office of Larry Webb
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Yes you must disclose the inheritance BUT it is not income and the trustee is NOT entitled to it. HOWEVER you should engage an attorney familiar with local practice to guide you.

Answer Applies to: California
Replied: 1/6/2012

Answer By Jane Downey
Moore Taylor Law Firm, P.A.
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You must disclose all of your assets and although you can keep the money, you will need to pay the unexempt portion to your creditors over the life of your plan.

Answer Applies to: South Carolina
Replied: 1/6/2012

Answer By Janet Lawson
Janet A. Lawson Bankruptcy Attorney
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Only inheritances recived within 180 days of the filing are property of the estate. I have not seen your Order of Confirmation so look at it see if there is anything there about inheritances.

Answer Applies to: California
Replied: 1/6/2012

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