When filing a bankruptcy case, one of the rudimentary rules is that you must list all of your property you own as of the date of filing. This basic concept can become complicated quickly, but generally means you have to list all of your stuff. However, there is an exception to that general rule.
Most of the time, property acquired after filing bankruptcy does not have to be listed and is not property of the bankruptcy estate. The exception has to do with an inheritance. Bankruptcy law allows property acquired, due to someone’s death, to be administered by a bankruptcy trustee if the person died within 180 days of the date the bankruptcy case was filed. This can include, money, real estate, life insurance proceeds, or other assets. This can really delay an otherwise swift bankruptcy process. Not because this is difficult to understand, but because it can extend the bankruptcy process well beyond the traditional discharge date, and even long after the 180 day deadline has expired. The key is when the person died.
Often times, when a person dies, it can take months or even longer, for the probate estate to be settled. But, simple because assets were dispersed long after the 180 day deadline has passed, doesn’t prevent those assets from becoming part of the bankruptcy estate if the person died within 180 after the day the bankruptcy case was filed. Fortunately, this scenario doesn’t come up very often. But, if it does, or even if you think it might, it is best to contact your attorney to avoid the allegation of trying to hide any inheritance or assets.
If you have questions about your debt, please do not hesitate to contact W M Law for a complimentary consultation with an attorney. We have three convenient locations in the Kansas City Area: Olathe, Independence and Northland. Contact us at 913-422-0909 for an appointment.
By Addam Fera, W M Law Attorney