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Once have been dismissed from a CH7 BK, is gift money given to you in jeopardy?

Saint Louis, MO |

Once have been dismissed from a CH7 BK, is there any way any gift money given to you have AFTER the discharge is in jeopardy?

Attorney Answers 6


  1. Of course, any creditor with a court judgment can use the legal process to attach it unless state exemptions protect it. Or did you mean to say your chapter 7 bankruptcy had been discharged? That is just the opposite of a dismissal. Hope this perspective helps!


  2. Once you have filed your bankruptcy petition, the only later acquired assets that can become property of the bankruptcy estate are divorce settlement proceeds, inheritance, or life insurance proceeds that come available within 6 months of your filing date, so, no, a gift made to you after the filing of your ch 7 bankruptcy petition will not be taken away from you.


  3. Discharge = discharge of debts at the end of a chapter 7 (you are no longer personally liable for them). Dismiss = you did not get a discharge and you are no longer in bankruptcy. I'm not sure what else it is that you are asking. Please clarify.


  4. The favorite answer of attorneys applies here: "It depends!" Two follow-up questions: Who and How?

    Who is giving you this money? If this is on the up-and-up, truly a gift from mom or dad or a friend, then you don't have anything to worry about. Gifts made to you after filing your bankruptcy are not included within your bankruptcy estate. But let's say someone gives you money as a gift-- again, mom or dad or a friend-- but you had recently "repaid" a debt you owed them, and listed it on your Statement of Financial Affairs in your Chapter 7. That would raise some red flags as being potentially a fraudulent transfer. Bottom line, like the IRS, the Bankruptcy Court does not want you to hide money only later to get it back.

    How this gift comes is also important. Gifts from the living are treated differently than "gifts' made to you by virtue of someone's death. If you become eligible to inherit (that is, you don't actually have to inherit yet) property because someone dies-- be it through a will, a trust, a TOD, an insurance beneficiary designation, or whatever-- within six (6) months of the date of filing bankruptcy, that inherited gift IS includable in your bankruptcy estate and you'll need to immediately notify your attorney.

    Failure to immediately notify your attorney of your inheritance within six months is a bad idea. Why? Because if your bankruptcy trustee finds out before you disclose it, they're going to wonder what else you may have been hiding and could possibly open up a much more extensive "audit" of your bankruptcy estate. Other possibilities might include a denial of your bankruptcy discharge (or its reversal if the Court has already given you one), or in the extreme, criminal penalties.


  5. You should call the attorney who filed your bankruptcy and ask them. Your attorney will know the details and you can better explain the situation.

    John Schleiffarth
    JCS Law
    314-561-9690

    Please contact me at (314) 561-9690 for help. Answers provided to questions on AVVO are general in nature and do not represent specific legal advice. I am happy to meet with you in person to discuss your case in detail, and at that time I can give you specific advice based on the full facts of your case. *The choice of a lawyer is an important decision and should not be based solely upon advertisements.


  6. Gift income is simply income. It is not subject to seizure after a chapter 7 discharge. But know that a chapter 7 trustee can reopen a case if he suspects fraud.

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