People may be concerned about an inheritance they expect to receive before filing for bankruptcy relief or what happens to an inheritance they receive after filing for bankruptcy relief.
If you receive an inheritance prior to filing bankruptcy, depending on the monetary amount you receive, you may lose a large portion or all of the inheritance. If the value of the inheritance is modest you may be able to protect the entire dollar balance. Creditors may try to take action against you to seize the inheritance, so consulting a bankruptcy lawyer is important. If you still need relief from your debt, but do not want to risk the loss of all inheritance proceeds, debt negotiation is always a possibility to reduce the amount of debt you have to pay. If negotiating a settlement is not feasible, you may still later decide to file bankruptcy.
The Bankruptcy Code applies rules to inheritances under 11 USC § 541 - Property of the estate. If you receive an inheritance within 180 days of filing for bankruptcy, the trustee can seize the inheritance assets and claim it as part of your bankruptcy estate. In calculating the days, the date you filed bankruptcy counts as the first day. However, your inheritance date is not calculated using the date you receive assets from the deceased person’s estate. The inheritance date is the date the person died who left you the inheritance. If the date of death is later than 180 days after filing bankruptcy, the inheritance income or assets are not subject to the bankruptcy.
For answers to questions about bankruptcy and how filing applies to your situation, consult a skilled bankruptcy lawyer. Harold Shepley & Associates is a Pennsylvania debt relief law firm. Call 1-866-284-7062 or visit us at www.shepleylaw.com to arrange a free consultation to discuss your financial concerns.