Behm Law Group explains what happens to inherited money when you file for bankruptcy.
Sometimes, one unfortunate outcome of the holidays is financial hardship. With an unknown future, you’re not sure whether or not to file bankruptcy. Consult with Behm Law Group, Ltd., to discuss your options. Residents of Mankato, MN: if your final decision is to file bankruptcy, we’ll walk you through the steps you need to take and inform you of what you can expect.
Let’s say that you have no foreseeable income. You file for bankruptcy. Then a relative unfortunately passes away, and you inherit some money. Can you keep that money, Mankato? The bankruptcy attorneys at Behm Law Group, Ltd., want you to be aware of the bankruptcy law regarding the inheritance of money:
Under 11 U.S.C. 341 and 521, if a person files for bankruptcy relief and then inherits money or property or receives a life insurance payment or a payment on a divorce property settlement within 180 days after the bankruptcy filing, any such money or property becomes property of the person’s bankruptcy estate and can be used by the bankruptcy trustee to pay that person’s creditors.
This means that within six months of the bankruptcy filing, that money may not necessarily be yours to keep, depending on the amount of your outstanding debt and the amount of the inheritance. With less than two months to affect any changes in the 2014 taxes you will pay at the end of the year, an inheritance received before 1/1/2015 could potentially change your taxes due. Mankato, the bankruptcy attorneys at Behm Law Group, Ltd., are getting a bit technical with you. We give you this information to provide you food for thought. Of course, there are more details to cover. We’d be more than happy to discuss any particulars on bankruptcy. Bankruptcy is our specialty, and we have many years of experience and expertise.
Receiving an inheritance doesn’t always mean someone has passed away. Suppose you’re named on a trust. The terms of the trust state you will receive money on a specific date. That would also constitute an inheritance for Mankato residents.
As you can see, nuances and other interpretations exist. We don’t expect our fellow Mankato, MN residents to become experts at bankruptcy law. But, we want you to understand some parameters, so you can make an informed decision. We’re the bankruptcy attorneys at Behm Law Group, Ltd., and we’re at your service. Happy Holidays!