Must You Inform Bankruptcy Court About Inherited Property?

Question from tiff, Must You Inform Bankruptcy Court About Inherited Property?

Answer from AI:

If you are involved in a bankruptcy case and you inherit property, it is important to understand your legal obligations regarding disclosure. Bankruptcy proceedings in the United States are governed by federal law, primarily under the Bankruptcy Code (Title 11 of the United States Code). Here are some general guidelines:

Disclosure Requirements in Bankruptcy

• Full Disclosure: When you file for bankruptcy, you are required to disclose all of your assets and liabilities. This includes any property you have recently inherited or stand to inherit.
• Inheritance as an Asset: Inherited property is considered an asset in bankruptcy. If you become entitled to an inheritance within 180 days after filing for bankruptcy, this property may become part of your bankruptcy estate, depending on the chapter under which you filed.
• Chapter 7 Bankruptcy: In a Chapter 7 case, non-exempt assets can be liquidated to pay creditors. If you inherit property within 180 days of filing, it could be subject to liquidation.
• Chapter 13 Bankruptcy: In a Chapter 13 case, inherited property could affect your repayment plan, potentially increasing the amount you need to pay to creditors.

Consequences of Non-Disclosure

• Penalties for Fraud: Failing to disclose an inheritance can be considered fraud. Bankruptcy fraud is a serious offense that can lead to penalties, including fines or imprisonment.
• Case Dismissal: Non-disclosure can also result in the dismissal of your bankruptcy case or the denial of a discharge of your debts.
• Revocation of Discharge: If the court discovers the non-disclosure after your debts have been discharged, the discharge can be revoked.

Steps to Take

1. Consult a Bankruptcy Attorney: If you are involved in a bankruptcy case and inherit property, it is crucial to consult with a bankruptcy attorney. They can provide personalized advice based on the specifics of your case.
2. Notify Your Trustee: If you are already in the midst of bankruptcy proceedings, you should promptly inform your bankruptcy trustee about the inheritance.
3. Amend Your Bankruptcy Filings: You may need to amend your bankruptcy schedules to include the newly inherited property.

Seeking Legal Advice

Because bankruptcy law can be complex and the consequences of non-disclosure are severe, it is highly recommended that you seek legal advice from a qualified attorney. They can help you understand your rights and obligations, and ensure that you comply with all legal requirements.

For more information on bankruptcy and the disclosure requirements, you can visit the U.S. Courts Bankruptcy page.

Note: This information is not legal advice but is provided for general informational purposes. Each case is unique, and laws can vary by state and change over time. Always consult with a legal professional for advice specific to your situation.