Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
Inheritance is separate property of the inheriting spouse. So, the bankruptcy trustee couldn't reach your spouse's assets, unless she is a joint petitioner on the bankruptcy. And, you can't reach those assets, either, as along as they are maintained as your spouse's separate property. The court has no jurisdiction to award you any portion of the inheritance unless it is commingled, or, the property appreciates after it's inherited, due to your personal effort (i.e., investment acumen).
Based on your facts, then, you may be better served by sticking with the Chapter 13. But, I would encourage you to consult with a local family law attorney, though, I think you will find most have zero bankruptcy law knowledge, and similarly, most bankruptcy attorneys have zero family law knowledge.
So, seek counsel very carefully to get the whole picture.
Terms and Conditions: By your continuing in this conversation with me, or by your clicking “Accept”, you are expressly agreeing to all of the following: (1) our communication is for entertainment purposes only; (2) you are not consulting me in my professional capacity as an attorney; (3) you do not seek to establish an attorney-client relationship with me, nor do I with you; (4) you will not rely on anything I say and you will obtain appropriate legal counsel via a traditional/office consultation with an attorney licensed to practice in the jurisdiction where your legal issue arises (and you may not use our communication to avoid taxpayer penalties imposed by the U.S. Dept. of Treasury); (5) by communicating with me in this public forum you are irrevocably waiving any right to privacy, confidentiality and attorney-client privilege concerning the matters discussed. You further separately declare that any payment made by you is not consideration for this contract, nor offered for any services rendered by me on your behalf, but rather is made in genuine admiration and respect for my desire to help others. If you do not agree with these terms and conditions, then you must advise me immediately.
Hope this helps.
Oh. Alrighty then, that changes everything.
You have no legal obligation to update the bankruptcy trustee of your financial condition, after the plan is confirmed, except as to your tax returns -- unless something in the plan confirmation orders states otherwise. And, as tax returns do not show the acquisition of inheritance, there would be nothing to trigger the trustee's or creditor's interest.
Absent any motion by the trustee or a creditor to reach the inherited assets, nothing will happen. But, if it does happen, then all of the inheritance is the property of the bankruptcy estate and it will be used to pay creditors to the extent that they would not have been paid under the preexisting plan.
A divorce would be discovered by the trustee, and any asset transfers or property disclosed during the divorce would be discovered as well. So, a divorce risks the inheritance unless you dismiss the Ch. 13 in advance. On the other hand, because the inheritance will be her separate property, except to the extent that it is required to cover joint marital bills, there still may be nothing left after the bills are paid.
So, it's pretty much an accounting problem. If you think you can pay off all of the marital debt with the inheritance, then maybe dismissing the plan makes sense.
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).