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Death on an inheritance was 9/12 received money 1/10. how long do i have to wait before filing CHP7. Death date or receipt date

Salt Lake City, UT |

I know that I have to report to the court if I receive an inheritance within 6 months of filing a chp7. She died in Sept of 2009 and I will receive the money in Jan 2010. If I do not file the Chp 7 until April is it 6 months from the death date or receipt of funds that I do not have to tell court.

Attorney Answers 3

  1. I think you may have some information backward. If you were to file bk and then become entitled to receive an inheritance within 6 months AFTER filing, you would need to disclose it. (The death date would determine when you are entitled to it.) The fact that you are receiving it prior to filing makes it an asset of your bankruptcy estate unless you can find a way to exempt it or spend it on regular ordinary expenses. How much is it? If you are in UT you need to talk to a UT attorney about exemptions in that state and see if you can exempt it. If it's something like $10K and you can pay down a mortgage or pay your attorney with it then it should not be taken by the CH 7 Trustee. (There are other examples of correct things to do with it..) But if it's a LOT of money, then you will need to discuss exemptions with an attorney before you file your bankruptcy case.

  2. The Means Test requires attorneys to look at the last 6 months of income for the Debtor's household. The Means Test helps an attorney determine whether you qualify for a Chap 7 bankruptcy. As far as the inheritance, it is considered income. Any money that a debtor or the debtor's household receives within the 6 months before filing is considered to be income. The inheritance would be counted as income on the actual date that you received it. Hear it appears it would be counted as income for January.

    I agree with the response above that if it is a large amount of income, the Court and Chapter 7 Trustee is going to want to know what you did with the income. You should keep all documentation on any money spent.

    You should consult a local bankruptcy attorney on how the inheritance will effect the filing of a Chapter 7 bankruptcy.

  3. I would also note that, while six months is the look-back period for the means test, you are obligated to disclose the last two years of income on your statement of financial affairs, so the trustee will know about the inheritance, and you can expect a series of detailed questions on where the money went.

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