Bankruptcy and Inheritance
According to bankruptcy law, if a debtor receives an inheritance within 180 days of filing for bankruptcy, that inheritance becomes the property of the bankruptcy estate. In this case a debtor will be required to disclose to the bankruptcy trustee and debtors that they received an inheritance. The bankruptcy law calculates the 180 days from the date of death of the person granting the inheritance. For example, if your uncle left you a $100,000; but you did not receive it until 2 years after he died, your inheritance could still become the property of the bankruptcy estate if your uncle died within 180 days after you filed for bankruptcy.
The Difference Between Chapter 7 and Chapter 13 Bankruptcy
An inheritance receives different treatment in a Chapter 7 than in a Chapter 13 bankruptcy
. In a Chapter 7 bankruptcy
, an inheritance within 180 days after your case was filed, will go to the trustee without any exemptions and will be used to repay creditors. In a Chapter 13, (before or after the 180 days) an inheritance will be used to calculate how much you should pay creditors. But in a Chapter 7 bankruptcy, if the inheritance is received after the 180 day time period, the trustee has no claim to it.