Your assets in a bankruptcy case: Inheritance and Life Insurance received before your case is filed.
Inheritance before you file: In any chapter of bankruptcy one of the questions we will ask is whether or not someone has passed away before we file your case, and if you have received or will receive an inheritance or life insurance proceeds. This is life insurance money, inherited IRA’s, or your share of an estate. Anything that you have inherited before you filed your case is considered one of your assets. This is an asset that can be used to pay your debts. It does not matter that the land or buildings are still in the deceased owner’s name. It also does not matter if there is an ongoing probate case that has not concluded so you do not know what you will get yet.
The law is that if someone has passed away before you file a bankruptcy case, what you will receive from that estate is part of your bankruptcy estate and can be used to pay your debts. We see this frequently; where someone has died and their land has never been divided or sold. The home, mountain land, or farm land still belongs to the family.
Inheritance and Life Insurance to be received after your case is filed. Within 180 days of the time you filed your bankruptcy case; if someone passes away and you will receive life insurance benefits, money or accounts of any kind, an interest in land or buildings, or possessions; then that inheritance is part of your bankruptcy case and it can be used to pay your debts. If this happens you need to notify us immediately so we can determine how this terrible event affects your case.