Will an inheritance be considered part of my estate if I file bankruptcy?

If you receive an inheritance bankruptcy filers may need to report this to the courts. An inheritance is given to a person by someone who dies, such as it being left in a will. If you receive this type of asset, it may be necessary to report that additional assets to the court, no matter what type of property it is. It may be part of your bankruptcy case. This is not always the case, though.

Inheritance and Bankruptcy

One of the biggest concerns when filing bankruptcy and dealing with inheritances occurs in the 180 days after you file for bankruptcy. If you receive an inheritance during the 180 days from the time that you file the documents with the court, you are obligated to report these inheritances to the bankruptcy court. In this case, it becomes part of your bankruptcy estate. Keep the following in mind:

• If you file Chapter 7 bankruptcy, the inheritance is considered an asset and is protected only under the state’s exemptions if they qualify.
• If you file Chapter 13, the value of the inheritance may be added to your assets to determine how much of a repayment you must make.

In situations where you receive that inheritance after the 180 days, it does not have to become part of a Chapter 7 bankruptcy estate.

Hire an Attorney

To protect your assets, hire an attorney. A bankruptcy attorney can help you to avoid losing these assets in a bankruptcy case in many instances.