Burlington County Bankruptcy Attorneys
How Will Bankruptcy Impact My Inheritance?
Most people don’t think of a potential inheritance when considering their assets, but it is of utmost importance to consider the possibility of an inheritance during your bankruptcy proceedings. Inheritances, whether they are monetary or material, are considered assets in your bankruptcy case, and unless they are handled properly, your creditors will be entitled to at least part of the inheritance.
In certain situations, there are alternatives to prevent creditors from obtaining your inheritance. The NJ bankruptcy attorneys at McDowell Posternock Apell & Detrick, PC have over 80 years of combined experience helping clients in situations involving inheritances.
Inheritances may Impact Bankruptcy Proceedings
If you are named as a beneficiary in the will of someone who has already passed away there are several potential outcomes:
- If the inheritance is relatively small, you may have enough exemptions to protect it during your bankruptcy proceedings.
- If you accept an inheritance larger than your allotted exemptions, you will be forced to liquidate it, passing the monetary value on to your creditors.
- Renounce the inheritance according to state and federal laws with the assistance of an NJ bankruptcy lawyer. When you renounce an inheritance, it will be awarded to someone else, according to what is indicated on the deceased’s will. In this situation, you can rest assured that instead of creditors, someone your loved one cares about is receiving the asset.
If you receive an inheritance within a certain timeframe after declaring bankruptcy, it is automatically considered part of your estate. This means you may need to surrender the inheritance to your court-appointed trustee, who will allocate it to your creditors. This time frame differs between Chapter 7 and Chapter 13 bankruptcy as follows:
- If you declare Chapter 7 bankruptcy, an inheritance is considered an asset if it is acquired within 180 days of filing for bankruptcy.
- If you declare Chapter 13 bankruptcy, and inheritance is considered an asset if it is acquired at any point during your 3 to 5 year repayment plan.
Seek bankruptcy advice with a free phone consultation
With one of the South Jersey bankruptcy attorneys at McDowell Posternock Apell & Detrick, PC at your side, your inheritances will be handled expertly, and you will receive all the benefits bankruptcy has to offer your financial future. Call us today or fill out our contact form to schedule a free phone consultation and learn more about how declaring bankruptcy can help ease all your financial worries.