You may have been ready to pull the trigger, so to speak, and declare bankruptcy. At this time, though, you may receive the devastating news that one of your loved ones has sadly passed away. While their Last Will and Testament has yet to be read, you may be fairly certain that you are one of the beneficiaries of their estate’s assets. And so, you may wonder whether it is still a good time to undergo a bankruptcy case if you need to at all anymore. With much to consider, please follow along to find out whether you should wait to file for bankruptcy until after you come into an inheritance and how a proficient Rockland County bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq., P.C. can help you with the timing of it all.
Should I wait to file for bankruptcy until after I receive an inheritance?
Generally speaking, we advise our clients to hold off on submitting their bankruptcy petition until it has been a while since they received their inheritance. Especially for a Chapter 7 bankruptcy case, New York State law applies a “look-back” period. That is, your appointed bankruptcy trustee may “look back” at the significant assets you received within the last 180 days. These assets may then be incorporated into your overall bankruptcy estate. Ultimately, they may get sold so that their liquidated funds may be distributed to your outstanding creditors. All of this to say, you may lose your inheritance as quickly as you obtain it.
As for a Chapter 13 bankruptcy case, you may be required to report your significant inheritance to your trustee. In response, they may assume that you have more disposable income to increase the monthly payments you give to your outstanding creditors through your repayment plan. Again, the inheritance being in your direct possession may be short-lived.
Will my inheritance make me eligible for a Chapter 13 bankruptcy filing?
You may get lucky and realize that your gained inheritance means you no longer have to file for bankruptcy in the first place. However, if you still find the need to undergo bankruptcy proceedings, you may now be heavily considering Chapter 13 bankruptcy over Chapter 7 bankruptcy. Well, an inheritance alone may not make you automatically eligible for Chapter 13 bankruptcy, just as it may not automatically disqualify you. However, as already mentioned, it may heavily influence your repayment plan.
The bright side is that, by paying a higher amount to your outstanding creditors each month, you may shorten the duration of your mandatory repayment plan. For example, you may complete it within three years now instead of five years. In this way, you may move on from your horrible bankruptcy experience and take steps toward financial freedom and fitness sooner rather than later.
In conclusion, if you are ready to declare bankruptcy, please first retain the services of a talented Rockland County bankruptcy attorney. Our team at The Law Offices of Allen A. Kolber, Esq., P.C. is ready and able to take on your case.
