I respectfully and strongly disagree with both of your first responders, only one of which claims to actually practice bankruptcy law.
Post-petition windfalls are widely misunderstood, and mythology is rampant. The authority of a bankruptcy trustee to claim a post-petition windfall on behalf of the estate is limited to 11 U.S.C. 541(a)(5). That section of the Bankruptcy Code itemizes only three types of windfalls subject to inclusion in the estate. Gambling or lottery winnings is NOT one of the categories. I do not disagree that informing your own counsel is wise, and ideally your counsel is adept enough to consult the statutes and properly represent your interests against a trustee that might be inclined to bully or overreach if enough winnings are involved.
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There is actually a Supreme Court case that took up this issue. In a Chapter 7 case a Debtor had purchased a lottery ticket prior to filing but won the lottery post-petition. The Court ruled since he had the ticket (asset) the expectancy of winning was property of the estate. Having $2 in your pocket you can stick into a slot machine is not the same "expectancy" as having purchased a lottery ticket. If you get lucky at the casino or track post-petition the winnings are yours. If you hit the lottery, you gotta check when the ticket was purchased.
A chapter 7 debtor with gambling winnings due to gambling which occurred after his case has been filed should usually not have a duty to share it with the trustee. However, just as suggested by Atty. Dezenberg, if the winning ticket was purchased prior to filing bankruptcy, the opposite would be true, unless the winning ticket was listed on the bankruptcy schedules, claimed as exempt, and the trustee had abandoned his interest in it. Even then, the trustee would have an argument that the value of the ticket was misstated, opening an avenue for him to challenge your discharge in bankruptcy, which can easily be reopened for up to two years after granted. If the ticket was purchased before filing and not listed in the schedules, the trustee could likewise challenge your discharge for dishonesty in failing to list everything. For these reasons, and as a practical matter, it would probably be easier and cheaper to offer something in settlement of such trustee claims rather than to litigate them to the bitter end. The outcome if fully litigated would be impossible to predict, but bankruptcy court decisions are always heavily influenced by the overall equities of the situation. Those who lose their discharge for failing to list trivial assets (such as a "not yet winning" lottery ticket) would often be folks who are guilty of other types of misconduct. Please do not assume that I am your attorney because of my response here. Call my office in Racine (262-633-3090 or email email@example.com) for clarifications or to make arrangements to retain me. Otherwise, I will not be taking any action on your case. See me on the web at www.jayknixonlaw.com. View over fifteen years of my past answers at http://www.lawguru.com/answers/search/attorney/jknixon. Answers may contain attorney advertising materials.
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