Chapter 13

[Conniebob1]

Hi how can i protect my inheritancewhile in chapter 13 bankruptcy

[justbroke]

Welcome to BKForum.

Unless you are in a 100% plan, it's unlikely that you can "protect" an inheritance. This is because you likely pledged all disposable monthly income (DMI) to the custody and control of the Chapter 13 Trustee when you're not in a 100% plan. The code also says that any inheritance is property of the bankruptcy estate within 180 days of filing. Even though that part of the code says 180 days from filing, it has been interpreted to mean at any time during a (non-100%) Chapter 13. (Likely because the Chapter 13 pledges "all" DMI in a non-100% plan.)

All I can say is do not try to hide it. I would caution against trying to defer any inheritance to which you became entitled to receive the benefit. That's because it doesn't go by when the inheritance is paid, but by when you became entitled to a payment.

If you are in an active Chapter 13, then this is a good thing to talk about with your bankruptcy attorney. If you were to receive a large inheritance, or even a small one, you may be able to negotiate with the Chapter 13 Trustee to take a "little." I can't define little.

[Conniebob1]

My dad has a business and house under land contracts he has loans taken out on both hes beem paying the loans back whem he gets paid from the partys involved in the land contract.also he was paying for his car this way.will i have to give that up too? And can i do anything like exemptions?

[justbroke]

Reads as a complex case. I can't provide legal advice on what you could do, but exemptions are a big part of bankruptcy. The question would be what exemptions apply and how much you could protect. That's a fact-specific question which requires an attorney in your area to answer.

Generally speaking, though, people can apply exemptions to property that they have (or are entitled to receive). Are you just "expecting" an inheritance and your dad has not yet passed? If that's the case, you may need to do some estate planning and figure out the way to manage the assets. I can't talk to this because I've never done estate planning (I probably should).

But unless and until you become entitled to receive any inheritance, it's all speculation. An inheritance doesn't exist until the event of demise occurs... so we don't worry too much about it now. In the context of a Chapter 13, should you receive a right to property due to bequest, devise, or inheritance, then that would change things. I don't know how to protect that from a Chapter 13.

[Conniebob1]

Me either.my dad passed away last monday so im scared of what may come if trustee takes inheritance i wont be able to pay his loans ect

[justbroke]

Me either.my dad passed away last monday so im scared of what may come if trustee takes inheritance i wont be able to pay his loans ect

I'm sorry to read that he has passed.

Please understand that you don't receive an inheritance until all of his creditors are paid. That is one of the tasks that is handled by probate and/or the estate administrator. Specifically who does that will depend on so many things related to wills and whether they are intestate that I can't explain (nor would I try).

Suffice it to say that your dad's estate is liquidated to the point that all the creditors are paid. Then, if there are remaining assets, they are bequest to the heirs.

You're going to need a good probate attorney since you will need to deal with your dad's assets and creditors. If there are other heirs, things could get complicated, but your dad's estate needs to pay its own bills first.