If you receive an inheritance before filing bankruptcy, whether it’s cash or physical property, then those items may become part of your bankruptcy.
What happens if you receive an inheritance after filing a Chapter 7 bankruptcy? Well, if you receive an inheritance within 180 days after filing your case, then that inheritance would be property of the bankruptcy estate. For example, you filed on January 1, 2022 and you received a discharge on April 1, 2022. Then, 10 days later your grandfather passes away and you receive $25,000 from his estate. Because you inherited that amount less than 180 days from the day you filed, and assuming you don’t have any exemptions to protect it, that $25,000 is now property of the bankruptcy estate. Same scenario but let’s say you received the inheritance on December 1, 2022. In this case, because you received the inheritance more than 180 days, then it’s not considered property of the bankruptcy estate and you get to keep it.
In a Chapter 13 bankruptcy, which is usually an affordable repayment plan, you wouldn’t lose those items, but you would have to pay the value of those assets you would’ve lost in a Chapter 7 over a period of 3 or 5 years.
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