Inheritance in active Chapter 13

[Beautifulday]

You have not inherited anything, or became "entitled to received the proceeds" of the inheritance, until the event that would trigger such bequest actually happens. I wish your parents a longer and more prosperous life. You are merely a beneficiary based on a certain event occurring. The bankruptcy estate has no interest in that benefit, unless and until you become entitled to receive (or actually receive) the proceeds (before) or within 180 days of filing.

So, if you were to file on January 1, 2018, the bankruptcy estate may be entitled to all or a portion of the any inheritance or bequest that happened before about June 30, 2018. If the triggering event happened on July 1, 2018, the bankruptcy estate would have no interest in that inheritance. If the triggering event happened on June 30, 2018, then the bankruptcy estate would have an interest in the inheritance.

Justbroke, I keep reading different information regarding the 180 days and inheritance and would like to see if you could clarify. I left message for my attorney to call me regarding a possible inheritance.

My father recently died and I will likely get around $15k from monies in a trust. I filed for Aug 2019 and my case was confirmed in December. The NDC website says it's a 100% plan, even though it isn't - my plan includes taxes and credit card debit to be paid over 5 years, but only about 30% of the credit card debit will be paid (my attorney doesn't know why the website says 100%).

My question is will the Trustee take the inheritance? From what I've read, the 180 day thing applies to Ch 7 cases, but not Ch 13. But from what you stated, it sounds like the 180 day rule "may" apply in Ch 13 too. I'm in GA.

[justbroke]

(I moved this to its own topic as it is regarding a Chapter 13)

My question is will the Trustee take the inheritance? From what I've read, the 180 day thing applies to Ch 7 cases, but not Ch 13. But from what you stated, it sounds like the 180 day rule "may" apply in Ch 13 too. I'm in GA.

Clarifying that this thread was about a Chapter 7, but you're asking about a Chapter 13.

The simple answer is that this area is not conflicting as the caselaw is quite clear. Chapter 13s have a special clause which build on 11 USC 541 known as 11 USC 1306. As you may have read, that 541 paragraph deals with what is property of the estate, and is where you find the 180 day rule. Paragraph 541 is applied to all cases of bankruptcy under Title 11 (the bankruptcy code).

However, chapter 13s have an additional clause in paragraph 1306 which supersedes -- builds on -- paragraph 541. It reads "all property of the kind specified in such section that the debtor acquires after the commencement of the case but before the case is closed, dismissed, or converted." That means that anything after the filing of a Chapter 13 is property of the estate because paragraph 1306 builds on paragraph 541 to include additional "aft-acquired" property.

Whether or not you can exempt this "aft-acquired" property will depend on your State non-bankruptcy exemptions (or federal exemptions if your state allows and you have opted for federal exemptions). There's no guarantee that your State (or exemptions) will cover any or the entire amount of the inheritance.

[flashoflight]

IMHO there are two issues. First is the asset coming into the estate prior to dismissal or discharge that was already discussed. The second issue is that we have a liquidation event where you get a check and you are required to devote all disposable income to the ch13 trustee in a less than 100% plan unless you can convince the trustee to let you spend it on necessary support for your family. So don’t think you are safe just because you exempted the asset prior to liquidation. Certain assets that are liquidated like homestead proceeds can sometimes be exempted as income in some states as long as it’s reinvested in a timely manner but that’s not the case here.

[despritfreya]

Beautifulday

If the links work - here is some info on the issue in your state:

In re Murdock, 547 B.R. 475 (Bankr. S.D. Ga. 2015)

https://www.leagle.com/decision/inadvbco160603000068

and

In re Gilbert, 526 B.R. 414 (Bankr. N.D. Ga. 2015)

https://casetext.com/case/in-re-gilbert-76

But also see:

In re Peebles, 500 B.R. 270 (Bankr. S.D. Ga. 2013) which appears to be a minority opinion asserting the inheritance is not property of the estate (which is contrary to the bk code hence the later two decisions referenced above).

https://cite.case.law/br/500/270/

This decision relies on what appears to be an unpublished decision in In re Walsh, Case No.07-60774-EJC, Southern District of Georgia so I doubt it has any impact on your issue.

You need to verify current case law with your attorney but this should give you some insight into the issues.

justbroke

Maybe set up a new thread for OP’s current issue????

Des.

[Beautifulday]

Thank you all for the replies.