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I am considering bankrupct. i don't know whether to file a chapter 7 or a chapter 13 because i am expecting a inheritence.

Florence, KY |

i owe about 50,000 on a line of credit,15,000 on a car, and about 100,000 on unsecure debt. i have no assets. i may inherit more than enough to pay these amounts off. if i file a chapter 13, do i pay a portion of the unsecure debts or the orginal amount which would be $100,000. do i pay a portion of the car and line or credit or the orginal amount owed at time of filing

i am afraid i will inherit this money before my 3 or 5 yr limit is up. i get different answers from different lawyers. i am in ky. wouldn't the law be the same no matter which lawyer i go to or does the lawyer make the agreement with the court when he sets up my case.

Attorney Answers 6


  1. The primary issue is that you anticipate potential inheritance of sufficient funds to pay the debt.

    In a chapter 13 you have got to pay your unsecured creditors at least the amount that they would have received had you filed a chapter 7 and assets been administered. However, if you truly have no assets, there are a range of options.

    Check out the book by Nolo Publishing on Chapter 13 to get a better idea of what it is all about.

    This answer is provided for informational purposes only. Actual legal advice can only be provided in an office consultation by an attorney licensed in your jurisdiction, with experience in the area of law in which your concern lies.


  2. You will get even more different answers here because the facts are soooooo sketchy and thin.
    You have to qualify (means test) to find out which you qualify.

    You are expecting an inheritance? Have they died or just old or just writing the will?

    I agree with the prior posting -read Nolo Press- it is available at most Public Libraries- or available on line.


  3. Your mere anticipation of an inheritance should not affect your bankruptcy status before you file. Theh key issue should be whether you qualify and whether Chapter 7 or 13 is the proper choice for you.


  4. Your mere anticipation of an inheritance should not affect your bankruptcy status before you file. Theh key issue should be whether you qualify and whether Chapter 7 or 13 is the proper choice for you.


  5. If you file a chapter 7 and become entitled to the inheritance within 180 days after filing, the bankruptcy trustee will be entitled to the inheritance (to the extent that you cannot claim it as exempt) and will use those funds to pay creditors.

    If you file a chapter 13, the inheritance would constitute disposable income which would be available to the chapter 13 trustee to pay creditors.

    If you are confident that you will not become entitled to an inheritance within 180 days, consider the chapter 7.

    Another possibility is that the person from whom you might inherit money or property might set up a trust with a spendthrift provision.

    Do consult with a qualified bankruptcy attorney who can also advise you or your future benefactor on the trust question. The stakes here seem high.


  6. Regardless of whether you file Chapter 7 or Chapter 13 any property you inherit within six months of the date you filed will become property of the bankruptcy estate. You may be able to execute a qualified disclaimer of your interest in the inheritance in order to not have the money become part of your bankruptcy estate and then the property would pass as though you predeceased the decedent.

    Chapter 7 is usually your best option if you qualify. In a chapter 13 if your plan does not revest property in the debtor then the inheritance would remain property of the bankruptcy estate. Also, in a chapter 13 the bankruptcy trustee might try to modify your plan years later in order to require a larger distribution to unsecured creditors.

    Your situation is complicated so you should definitely seek a board certified attorney to help you.