How Will an Upcoming Inheritance Affect My Chapter 7 Bankruptcy Case?

Entitled to Receive an Inheritance but Don't Yet Possess When You File

Property that you are legally entitled to at the time you file for bankruptcy is included in your bankruptcy estate, even if you have not actually received it yet.  A common example is property you have inherited but not yet received.  All property subject to the court's jurisdiction is collectively called your "bankruptcy estate."  The bankruptcy trustee is very interested in your bankruptcy estate because it can potentially be taken from your estate and sold to pay your unsecured creditors.

Inheritance Acquired Within 180 Days After You File

Most property you acquire or become entitled to after you file bankruptcy is not included in your bankruptcy estate.  There are exceptions however.  If you acquire or become entitled to acquire certain property within 180 days after filing, you must report the property to the bankruptcy court and the trustee may take it.  This 180-day rule applies, in part, to property inherited during the 180-day period.  You must report this on a supplemental form, even if the bankruptcy is over.  If the do not report it and the trustee learns of the inheritance, the trustee could ask the court to revoke the discharge and you can be ordered to turn over the assets.