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TJ, Esq.
TJ, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 12133
Experience:  JD, MBA
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Can a monetary inheritance be garnished if I file for bank

Customer Question

Can a monetary inheritance be garnished if I file for bankruptcy?
Submitted: 7 years ago.
Category: Bankruptcy Law
Expert:  TJ, Esq. replied 7 years ago.

Hello and thank you for allowing me the opportunity to assist you.

Question: “Can a monetary inheritance be garnished if I file for bankruptcy?”

Answer: I’m sorry to say that the answer is yes. When you file for bankruptcy, you are only granted a limited number of exemptions (exempt assets means they are protected). In the case of cash, you can only protect a small amount. Anything over the small amount can be used to repay creditors regardless of the source (with a couple of exceptions for things like Social Security). Inherited money is not given special protection. I wish I had better news.

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DISCLAIMER: Please be aware that only an attorney licensed in your state is authorized to advise you in legal matters, and that the limitations of this setting may prevent your legal issues from being thoroughly addressed. Accordingly, please understand that (1) by answering your question(s) I am not acting as your attorney, (2) my answer(s) should be construed as general information only, and (3) our discussion is not an adequate substitute for an in-person consultation with an attorney.

 

TJ, Esq. and 3 other Bankruptcy Law Specialists are ready to help you
Customer: replied 7 years ago.
Is there anyway I can keep that money from being garnished, like for example, setting it up in a trust for my autistic son for his future or by some other method?
Expert:  TJ, Esq. replied 7 years ago.
Unfortunately, the answer is no. If you attempt to give the money to a trust, to a relative, etc., then the bankruptcy trustee can reverse the transfer. In a nutshell, it's considered fraud to transfer assets in order to avoid them being used to repay creditors. I really wish I could say otherwise ...




DISCLAIMER: Please be aware that only an attorney licensed in your state is authorized to advise you in legal matters, and that the limitations of this setting may prevent your legal issues from being thoroughly addressed. Accordingly, please understand that (1) by answering your question(s) I am not acting as your attorney, (2) my answer(s) should be construed as general information only, and (3) our discussion is not an adequate substitute for an in-person consultation with an attorney.

TJ, Esq. and 3 other Bankruptcy Law Specialists are ready to help you
Customer: replied 7 years ago.

How do I stop the motion for a chapter 13 bankruptcy? We just filed for it today.

Expert:  TJ, Esq. replied 7 years ago.
You're going to need to file a motion to dismiss the bankruptcy. The court will probably grant the request unless it thinks that creditors will be harmed by the dismissal.



DISCLAIMER: Please be aware that only an attorney licensed in your state is authorized to advise you in legal matters, and that the limitations of this setting may prevent your legal issues from being thoroughly addressed. Accordingly, please understand that (1) by answering your question(s) I am not acting as your attorney, (2) my answer(s) should be construed as general information only, and (3) our discussion is not an adequate substitute for an in-person consultation with an attorney.

TJ, Esq. and 3 other Bankruptcy Law Specialists are ready to help you
Customer: replied 7 years ago.

If the inheritance is garnished, can they only garnish what is owed to the creditors and the lawyer's fee or are they able to garnish more?

Expert:  TJ, Esq. replied 7 years ago.
The most that can ever be taken from you is the amount that you owe the creditors (plus fees, etc.). If you can afford to repay all of your debt via the inheritance, then your case will be dismissed for you because it will likely be ruled as bankruptcy abuse. In that case, your creditors will be able to come after if you don't voluntarily repay ... but again, they can only take what you owe them, nothing more.


DISCLAIMER: Please be aware that only an attorney licensed in your state is authorized to advise you in legal matters, and that the limitations of this setting may prevent your legal issues from being thoroughly addressed. Accordingly, please understand that (1) by answering your question(s) I am not acting as your attorney, (2) my answer(s) should be construed as general information only, and (3) our discussion is not an adequate substitute for an in-person consultation with an attorney.