How the bankruptcy Trustee treats an inheritance in your case depends on when you became entitled to receive it and what type of bankruptcy you are filing.
If you've filed for Chapter 7 bankruptcy, and you become entitled to an inheritance within 180 days of your filing date, the inheritance will be a part of your bankruptcy estate, and can be used to pay your debts. The important date is when your right to the inheritance is fixed, typically on the date of a person's death. You might not receive property or money from someone's estate for many months.
If you've filed a Chapter 13 case, your inheritance can be used in determining how much you have available to pay creditors under your repayment plan, and the 180-day limit doesn't apply. In either type of bankruptcy, you must inform the bankruptcy trustee about the inheritance.
If you are thinking of filing bankruptcy and have just received an inheritance or might be in the near future, make sure to speak to Jacoby & Jacoby either online or call us at 631-289-4600 to schedule a FREE consultation. We can review your individual situation and answer all of your questions.