If I file bankruptcy and then receive and inheritance, does the inheritance become part of my bankruptcy estate?
Answer
The Bankruptcy Code includes in the bankruptcy estate any property that the debtor acquires or becomes entitled to by bequest, devise, or inheritance within 180 days after the petition is filed, if such property would have been property of the estate if the debtor had an interest in it at the time of the petition. The inheritance is estate property.
The Bankruptcy Code
The Bankruptcy Code states that a petition for bankruptcy creates a new legal entity separate and apart from the debtor's prepetition estate. The debtor`s property prior to the date of bankruptcy goes into the bankruptcy estate. In due course, all the prepetition property is liquidated and its proceeds distributed to creditors. At the same time as the bankruptcy estate is created, the individual Ch. 7 debtor begins to accumulate a new estate. This new estate consists of earnings and property acquired after the filing as well as property that has been released to the debtor from the estate as exempt or abandoned by the trustee has having no economic value. These postpetition assets of the debtor are the basis of his or her fresh start. Petition creditors cannot reach them because they are stayed from doing so pending the debtor’s discharge, and are thereafter permanently enjoined from collecting prepetition debts.
For more bankruptcy information read: Bankruptcy: Postpetition Income Part I, Bankruptcy: Postpetition Income Part II, Bankruptcy: Automatic Stay, and What is Bankruptcy, Bankruptcy: Fresh Start, Bankruptcy: Student Loans, Bankruptcy: Means Test, Bankruptcy: Income Eligibility, Bankruptcy: New Asset Evaluation
