If you receive an inheritance shortly after filing for bankruptcy, the trustee may be able to take it to pay your creditors. To prevent people from using bankruptcy to protect an impending inheritance, congress created a 180-day rule. This rules basically states that any person who receives an inheritance within 180 days of a bankruptcy filing requires that person to amend the bankruptcy schedules and notify the court. This is true even if the case has already been closed!
The inheritance will become part of the bankruptcy estate and the trustee can then use any nonexempt portion to pay creditors. Any inheritance received after 180 days will not become part of the bankruptcy estate and the trustee cannot touch it.
If you’re considering filing for Chapter 7 or Chapter 13 bankruptcy, or if you have any questions about your legal rights as a debtor, you may want to speak with a qualified bankruptcy specialist. To set up an appointment for a free consultation, call the Packard law firm at (210) 340-8877.