Ask A Lawyer: Must I Report An Inheritance After Filing A Chapter 7 Bankruptcy Case?

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Do you have a question about bankruptcy? Bankruptcy is a complicated process and requires the assistance of someone with the background and experience to answer all of your questions. Denvil Crowe is one such individual. This blog addresses what happens to property received after the bankruptcy petition is filed. In this case, an inheritance. So, what if an inheritance is received after a Chapter 7 bankruptcy case is filed?

The filing of a bankruptcy petition creates a bankruptcy estate. Federal law specifically provides what property is part of the bankruptcy estate. It is this estate, or pool of assets, that is used to satisfy the claims of creditors.  

Federal law further provides that any interest in property that would have been property of the estate if such interest had been an interest of the debtor on the date of the filing of the petition, and that the debtor acquires or becomes entitled to acquire within 180 days after the filing of the bankruptcy petition, such as anything received by bequest, devise, or inheritance, becomes property of the bankruptcy estate.

Federal law also requires that debtors file a supplemental schedule disclosing the acquisition of any assets such as an inheritance after the filing of the bankruptcy petition (post-petition) within 14 days after the information comes to the debtor’s knowledge.

To summarize, inheritances, bequests of personal property, and devises of real property received within approximately six months of the filing of a bankruptcy petition are considered part of the bankruptcy estate. Once the 180-day period has passed, Chapter 7 debtors are free to receive an inheritance without it becoming part of the bankruptcy estate.

This is a question that involves a complicated analysis to arrive at a correct answer.Get answers! Relieve yourself of the stress of uncertainty and confusion! Call Denvil Crowe for a sense of relief and peace of mind today! An experienced bankruptcy attorney like Denvil Crowe may provide valuable assistance throughout the entire lifespan of a bankruptcy case, including the circumstance where an inheritance is received post-petition.

Elvis is the "King of Rock and Roll" and Denvil Crowe is the king of Tupelo's most qualified bankruptcy attorneys. If you have any questions that you need immediately answered or if you just need someone to help you clearly and accurately review and consider your options. We can help you decide whether bankruptcy is your best option. Call 800-429-HELP (4357), email us at Contact@denvilcrowe.com  or check us out online today!

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