If you receive a considerable inheritance from your loved one who has sadly passed away, you may believe that a lot of your emergent financial issues will automatically disappear. But if timing is really not in your favor, and you declared bankruptcy before realizing you were going to receive this financial aid, you may start to wonder whether this gift is actually a burden. Well, if this is the predicament you are currently stuck in, please continue reading to learn what happens when you inherit money after filing for bankruptcy, and how an experienced Rockland County consumer bankruptcy lawyer at the Law Offices of Allen A. Kolber, Esq., P.C., can help you handle your ongoing case appropriately.
What happens legally if I inherit money after filing for bankruptcy?
If you inherit money after filing for bankruptcy, the timing of it all is everything. This is because of the 180-day rule under the United States Bankruptcy Code. This rule holds that any inheritance you receive or become entitled to within 180 days of filing for bankruptcy must be reported to the bankruptcy court and subsequently may be used to pay off your disclosed debts. Specifically, the date you become “entitled” means the date the deceased passed away, not the date you receive the money.
Therefore, if the deceased passed away within 180 days of your bankruptcy filing date, your bankruptcy trustee may hold the right to take your inherited money and make it a part of your bankruptcy estate. Of note, your bankruptcy estate is the property and assets your bankruptcy trustee can use to sell, liquidate, and compensate your outstanding creditors. The overall argument here is that this post-filing asset existed at the time of your filing.
What happens if I fail to report my inheritance in my bankruptcy case?
It is no excuse that you did not know of the inheritance the deceased put aside for you at the time of your bankruptcy filing. Also, it does not matter if the probate process for the deceased’s estate is delayed, and you have not yet received this money. No matter what, as a debtor in a bankruptcy case, you must report this inherited money to your bankruptcy trustee as soon as you learn of it. Otherwise, you may risk facing complications with your bankruptcy case, not to mention other serious consequences.
For one, if your bankruptcy trustee learns of an inheritance through a probate filing rather than your personal report, they may motion to deny or revoke your bankruptcy discharge. This means that your once-dischargeable debts may fall back into your immediate financial responsibility to pay off, without the bankruptcy court’s protection. Even worse, you may be accused of and subsequently charged with bankruptcy fraud, which may result in hefty fines and even imprisonment in a federal prison.
For further legal assistance, please hire a skilled Rockland County consumer bankruptcy lawyer from the Law Offices of Allen A. Kolber, Esq., P.C. Schedule your initial consultation with us today, and see just how much we can do for you.
