Inheriting Money during Bankruptcy

The most confusing and heartbreaking part of bankruptcy can occur if a loved one passes and you end up inheriting money or property in bankruptcy. It is confusing because it is a huge exception to the general rule that only assets that exist on the day of filing are part of your bankruptcy estate.  It is heartbreaking when you lose money you need to help you pay for a loved one’s funeral expenses.

Sean C. Paul, Missouri bankruptcy attorney, explains how inheriting money can affect your bankruptcy case.

 

The 180 Day Rule

This rule states that property inherited within one hundred and eighty (180) days of filing for either Chapter 7 or Chapter 13 bankruptcy, the property will be available to creditors. If you inherit the property after that period and have filed for Chapter 7, you may keep all of the inheritance. In Chapter 13 filing, the judge may still require you to pay this amount over for the benefit of creditors if you are still under your repayment plan, since the rule in a Chaptr 13 is that all disposable income must be used for creditors.

Call your bankruptcy attorney immediately if someone dies.  The rule is based on when you become entitled to inherit – NOT when you actually get the money.  So if someone dies within 180 days of your filing, you must turn the money over even if you don’t get it within 180 days (which you normally would not, anyway).  If you fail to turn it over, you might lose your discharge in bankruptcy.  You could even be prosecuted for not disclosing assets!  If you have any doubt at all, CALL YOUR MISSOURI BANKRUPTCY ATTORNEY!

 

Spouse

Your spouse’s money is not necessarily your money.  If you file bankruptcy, and your spouse does not, you probably won’t have to turn that money over.  However, DISCLOSE IT!  Talk to your Missouri Bankruptcy attorney to make sure what you need to disclose and what you need to turn over.

 

 

Sean C. Paul is licensed to practice law in the State of Missouri. His practice is located in south St. Louis County and downtown Kansas City, Missouri. He can help you with your Chapter 7 or Chapter 13 Bankruptcy case.  Sean can explain to you the rules about inheriting money or property in bankruptcy. Sean C. Paul will give you the individual attention you deserve. He will meet with you one-on-one to determine how he can help you. If you are considering filing bankruptcy in Missouri, please call today. Sean C. Paul, Attorney at Law Google+ Profile.

 

The post Inheriting Money during bankruptcy – Missouri bankruptcy attorney appeared first on 314-827-4027.

Source: Bankruptcy blog