There are a few things you can do to protect the money.
If you haven't received the money yet, and the executor still has control over the property, you may be able to arrange to place the money into a bank account titled into a trust with you as a beneficiary. This would keep the money OUT of your possession and while income received from the trust would be counted against you, the money remaining inside the trust would not be accessible by creditor or the IRS, and you can possibly arrange the tust so that you have enough to fund basic living costs
Exemptions, as mentioned above, can protect much of your inheritance through various exemptions. It takes someone with experience, but it isn't all that difficult to maximize your exemption amount.
Finally; if you house is upside-down (the outstanding loan is higher than the value of the home) then it may be time to attempt to short-sell the home and step away - and downsize into a smaller living space.
Definitely talk to an attorney (quickly) before paying ANY more on your debts.
Matthew Johnson (Johnson Legal Group, PLLC 206.747.0313) is licensed in the State of Washington and performs bankruptcy, short sale negotiations, and estate planning in Whatcom, Skagit, Snohomish, King and Pierce counties. The response does not constitute specific legal advice, which would require a full inquiry by the attorney into the complete background of the facts and circumstances surrounding this matter; rather, it is intended to be general legal information based on the limited information provided by the inquirer; it This response also does not constitute the establishment of an attorney-client relationship, which can only be established after a conflict of interest evaluation is completed, your case is accepted, and a fee agreement is signed
Unlikely that you will have sufficient exemptions to fully exempt all of this money, but depending on what other property you have, you may be able to cover alot of it with the Federal wildcard exemptions. I would recommend that you consult with a qualified bankruptcy attorney.
Although exemptions can protect property, exemption planning can be very tricky. One mistake & you may blow your money away. So I would urge you to play it safe & consult with an experienced bankruptcy attorney in your community for advice before you jump off the cliff into Chapter 7 bankruptcy.
Hope this perspective helps!
Don't be in a big rush to file bankruptcy. If your wages or assets aren't in danger of being seized, a quick filing is not necessary. Instead, you should get advice on how to properly plan your bankruptcy case to maximize the property you can keep.
I am happy to answer general questions about my practice areas on this website. . However as I'm sure you understand we do not have an attorney/client relationship. Therefore my suggestions do not constitute legal advice. I urge you to contact counsel in your jurisdiction from whom you feel you can obtain trusted information. http://www.drescherlaw.com
To be honest I would use that money to live on until you can secure employment. I agree there is no rush to file bankruptcy in your situation. Consult a local attorney if you are still uneasy but there is not enough exemptions to cover the 18k and if you file now most of it will end up being disbursed to your creditors and you'll still be unemployed with no safety net. I hope this helps you make a wise decision regarding the overall situation.