Inheritance while in Chapter 7

[JoeBankrupt33]

I really didn't ever anticipate having to ask such a question, but it appears as though my grandfather might die very soon.

I filed on 2/3 and I have my 341 on 3/11, so I am well within the 180 day timeline which requires me to report any inheritance to the trustee.

I don't have any idea how large or how small the inheritance could be, but he has told me in the past that he was planning on leaving 250k for my children and a home with 100k equity to be split among my brother, my sister, and me. I'm pretty sure he has a will, but it is possible that the money for my children has just been put in my name.

So, if I receive an inheritance that is much larger than my total debt, can the trustee only take enough money to pay my creditors, or do they take the whole thing? That would really stink, but I can't find any info on this.

If, however, the money is put in my kids' names, is that protected from the trustee?

[AngelinaCatHub]

Depends upon the wording of the Will. You stated you had to split with brother. For kids, etc.

That being said, pray you get discharged and closed soon. I would if in your position, make a family Trust and put the monies into the name of the Trust. IF they catch you mid stream, they can un close your bk. Not fair, but ‘stuff happens’. Let time go by, and BE QUIET. Best I can do for you this evening. ‘Hub

[CHAP7TX]

Regarding Inheritance - I am in a similar situation, but had my 341 on 2/9/09. At the time of filing my Chap 7 I did not know the amount of my inheritance either. I did include the inheritance in my Schedule C, but put 0 for the amount (as I did not know the amount - my inheritance is contingent on the sale of a home). I too am receiving a portion of the inheritance, so I stated on Schedule C '1/6 Beneficiary to Inheritance'.

Since my filing and at my 341 meeting the home went into escrow so I knew approximately how much my inheritance would be, so I had to update my Schedule F and resubmit to the clerk. At the meeting I explained the situation to the Trustee and knew that he would want the contact information of the attorney handling the estate, so I had that information ready for him. From what I understand, the Trustee will receive my portion of my inheritance directly, then pay any creditors who have filed claims, what is left over, if any (excluding my Federal exemption), will be returned to me.

A heads up - I don't know what state you are in and if there is a 'wildcard' exemption but you can use it for the inheritance. If your state has no wildcard, you might want to consider the Federal exemptions. However, as your inheritance is seperate property, you can only take 1 exemption (not 2).

Good Luck!

[JoeBankrupt33]

Thanks guys. I just want to be sure that any excess is returned to me in case I receive an inheritance that is larger than the amount of debt. Although I want some of my creditors to rot in their graves, I did borrow the money.

As for exemptions, I'm out of luck. I'm in CO, and there is no wild card and I can't opt for the Federal exemptions.

Ofcourse, I also have another problem that's not covered in this forum. After the bankruptcy, we are starting our divorce. Bad time to get an inheritance.