What if I inherit property or win the lottery after I file bankruptcy?
Inheritances, windfalls, insurance recoveries, Lottery Winnings etc within 6 months.
In a chapter 7 case, in the event that you become entitled to any windfall of money within 180 days of the date of the filing of the petition, that property becomes property of your bankruptcy estate. Entitlement does not mean the date that you receive it, it means if the event that triggers your right to receive it occurs then you are entitled (date of death for inheritance, date of lottery). The property will be analyzed to see if any of it can be claimed as protected under Exemption laws and if not, then it becomes property available to your creditors and if any is left over, then you get remainder. I have had a few clients recently inherit from parents who unexpectedly died and it created a mess. IF YOU ARE A JOINT SIGNER ON A PARENT’S ACCOUNT, REMOVE YOUR NAME FROM THE ACCOUNT PRIOR TO FILING A CASE ESPECIALLY IF NONE OF THE MONEY IN THE ACCOUNT IS YOURS. After the case is over you can be put back on the account.
In a chapter 13 case, any windfall is property of the bankruptcy estate and could be used to pay all of your creditors whether it is otherwise exempt or not, this includes personal injury lawsuits from car wrecks too.
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