I am a bankruptcy attorney and I would be happy to assist you. In a Chapter 13, a change in your income (ex- a new job or inheritance) can change your plan payment and the amount you must repay to creditors in the plan. The consequences of receiving the inheritance also depend on whether the property is exempt. If the inheritance is from a life insurance policy, then it will exempt in Kansas under Code
40-414(a). If it is merely money left for you, it will not be exempt. Personal property (ex- jewelry) may also be exempt.
As you are aware, you don't have to give up your property in Chapter 13; instead, you make monthly payments to be divided among your creditors, as part of your Chapter 13 repayment plan
. How much you have to pay into your plan depends, in part, on your nonexempt property. Your unsecured creditors (those holding debts that aren't backed by collateral) are entitled to be paid at least as much in Chapter 13 as they would have received if you had used Chapter 7: the value of your nonexempt property. So, if you receive an inheritance at any time during your 3 or 5 years that isn't exempt, you will have to add its value to what you repay to your unsecured creditors, which will increase your plan payments. (If the property is exempt, it has no effect on your repayment plan.) Your attorney needs to amend Schedule B, C & the Plan or the Trustee will file a Motion to potentially dismiss or convert your case to Chapter 7.
If you inherit more than 180 days after you file, the consequences may differ in a Chapter 7. A Chapter 7 trustee cannot claim the inheritance in this case; it's yours to keep, whether or not the property is exempt. In a Chapter 13 filing, however, the judge may take an inheritance into account, even if more than 180 days have passed since you filed, when deciding on a motion by the trustee or a creditor to require you to amend your plan. This can happen when your income and assets increase for any reason during the repayment plan period, from three to five years.
Therefore, make sure your attorney amends schedules B & C and the plan right away to figure out what can be protected on Schedule C
and how much your new plan payment will become.
I hope my answer has assisted you and that you will leave me a positive rating! If you need any future questions answered, please feel free to ask for me by name.