Many times clients have unexpected deaths in the family. Many times this can cause a problem if the debtor is to receive an inheritance. If the debtor is already in bankruptcy and the case is pending, any inherited property or any property that is expected to be inherited could be subject to the bankruptcy Trustees control. If the debtor received an inheritance within the last six months, that too could be subject to the Trustee's control. What if you already spent the money? Well, the Trustee could ask where it all went and look to that party or entity for recovery. If that party no longer has the money or property, it can be sued and be indebted to the bankruptcy court. Typically, the Trustee can only go back as far as six months on recovering any type of inheritance, but it could be longer. It is imperative to disclose this in your bankruptcy or else you could lose your discharge and have your case dismissed. Of course, the property is only subject to turnover in a chapter 7. Property is not liquidated in chapter 13.
Read more detail on Recent Bankruptcy Posts –