Inheritance and Bankruptcy

Posted on December 10, 2013. Filed under: Chapter 7 Bankruptcy, Consumer Alerts | Tags: , , |

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In Chapter 7 Bankruptcy, under Section 541 of the Bankruptcy Code, any inheritance that you would become entitled to within 180 days of filing bankruptcy could be an asset of your bankruptcy estate and would need to be immediately reported to your attorney and the trustee. There is a recent case that holds that if the money you are to receive from the deceased is from a “payable on death” account, then those moneys may not fall under this definition and may not have to be turned over to the trustee. Regardless, you should immediately contact your attorney should you come into an inheritance after filing bankruptcy and let him or her determine if the inheritance is an asset of the estate or not and contact your trustee.

photo credit: cali.org via photopin cc

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