06 Feb Am I Required To List Inherited Assets?
When a person files bankruptcy, the creditors, the trustee and the Court have a right to know everything of value to which the filing person has a claim. Therefore, if you and all your cousins inherited your grandmother’s teapot purchased from the S & H Green Stamps store in 1963, even if your cousin has the teapot at her house, your share of the teapot must be listed as an asset in your bankruptcy.
Many times clients present their attorney with the idea that something inherited shouldn’t be listed as an asset because it’s sacred in some way. Unfortunately, the fact is that the bankruptcy laws view inherited assets as a windfall, and do not give any breaks for assets which were inherited. In fact, if you should inherit something up to 6 months after filing your bankruptcy, whatever is inherited becomes subject to your bankruptcy (property of the bankruptcy estate). In other words, if you don’t have any exemptions available for your inheritance, the Chapter 7 trustee may take (liquidate) your inheritance to pay your creditors. If you are in a Chapter 13 case, you need to visit with your lawyer to find out what changes you may need to make to your plan.
See also, What Your Bankruptcy Lawyer Can’t Fix by Cathy Moran
Can I protect some assets… by NJ Bankruptcy Center
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