One fairly common concern when filing bankruptcy is what happens to any assets received as inheritance? Your inheritance can be one of the largest sources of income in your life. Rarely will you receive a large check or a major asset like a family home, and protecting that cash or asset is an important concern, especially when facing financial trouble. If you are expecting to receive inheritance in the future, or you already have received inheritance, you should try to understand the implications of filing bankruptcy on those assets.
What if I receive Inheritance After Filing Bankruptcy?
The rules vary by state, but typically you will find that there is a certain time frame after your bankruptcy is filed during which any inheritance received will be claimed to pay off your creditors. For example, in some states, any inheritance received within 180 days of filing bankruptcy may be claimed to repay your creditors. You should be sure to speak to a local attorney in order to learn the exact rules for your state.
If a family member is struggling with health problems and you are also considering bankruptcy, you are truly facing some stressful conditions in your life. You should understand the ramifications of any decisions you make during this stressful time, and a lawyer may be a good advisor for you now. It can be difficult to consider your family’s health as a factor in financial decisions, but when filing bankruptcy be sure to consider whether you are likely to receive significant inheritance in the near future.
What happens to Inheritance I have Already Received During Bankruptcy?
Typically any money or assets already received as inheritance will be treated the same as any other assets you own. If you received a lump sum of cash as inheritance, that cash may be forfeit to repay your creditors during your bankruptcy. If you own any assets from inheritance such as a home or car, you should speak to your attorney to see if there is any way to protect those assets during your bankruptcy filing.
Before speaking to an attorney, you can review bankruptcy basics on this site to educate yourself if you are unfamiliar with the bankruptcy process. Also be sure to read up on the different types of bankruptcy.
Are there Special Rules for Inherited Assets During Bankruptcy?
While laws vary by state, you should not assume that your inheritance will enjoy any special protection during your bankruptcy filing. Any cash or assets you have inherited may be used to determine whether you are eligible to file bankruptcy, and they may also be subject to the ruling of the court during your bankruptcy.
Your best course of action with any specific bankruptcy question is to speak to a local attorney for a free consultation, like the one offered through this site. Bankruptcy laws are complicated, and they vary based on where you live. A local attorney can help you with your specific questions, and give you counsel during your bankruptcy.