QUESTION
If you are in chapter 13 for 3 ½ years and receive an inheritance, can the trustee take it?
Asked on Jan 08th, 2016 on Bankruptcy - Michigan
6 ANSWERS
Bankruptcy Attorney serving Madison, WI
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Richard B. Jacobson & Associates, LLC
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Yes. Which is why your lawyer should try to negotiate a discount very soon.
Answered on Jan 31st, 2016 at 6:43 AM
When you receive the inheritance is not important. What is important is WHEN the person died. If before the bankruptcy was filed, then the inheritance should have been disclosed on the schedules. If exempt, no problem. If the person died more than 6 months after the bankruptcy was filed or after confirmation, again no problem. But the devil is in the details that are not provided.
Answered on Jan 29th, 2016 at 5:15 PM
Yes, you have to decide whether it makes more sense to turn it over to the trustee and stay in your plan or drop out of the chapter 13 and try to settle your debts with your inheritance.
Answered on Jan 29th, 2016 at 5:12 PM
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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Yes, the trustee can take some or all of it. If it's more money than needed to pay off all your creditors at 100%, the trustee can't take more than needed to pay them off. Your attorney should have questioned you about a possible inheritance before you filed the Chapter 13. And advised you that your benefactor should change his/her estate plan so you would not receive anything until after the completion of the plan. If your attorney didn't, you've got a malpractice claim which could recover any funds you lost because of his/her negligence.
Answered on Jan 29th, 2016 at 5:12 PM
Bankruptcy Chapter 7 Attorney serving Fort Collins, CO
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The Salas Law Firm LLC
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It is very possible. I believe you have an obligation to disclose the inheritance and you should probably contact an attorney.
Answered on Jan 29th, 2016 at 5:10 PM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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Generally yes, it is a source of money to pay the creditors. See or get a bankruptcy attorney. You may have some options you want to consider.
Answered on Jan 29th, 2016 at 8:31 AM