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Maverick
Maverick, Attorney
Category: Bankruptcy Law
Satisfied Customers: 6422
Experience:  20 years of professional experience
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I am halfway through a 3 year plan on Chapter 13. My father

Customer Question

I am halfway through a 3 year plan on Chapter 13. My father has just passed away and there will be some money coming to me from the sale of his home. Must I give it all to the Trustee?
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  Maverick replied 1 year ago.

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Expert:  Maverick replied 1 year ago.

ANSWER:

Receiving an inheritance during a Chapter 13 can increase what you have to pay into your repayment plan. How much you may be required to pay also depends on when your inheritance was received. An inheritance is considered received when you become entitled to it which is at the time of your father's death; not when you actually collect it. In your case, this comes under the laws that govern an inheritance received more than 180 days after the BK was filed.

The Bankruptcy Court for the Middle District of Florida (Glenn, J.) rules on this issue in the 2000 case of In re Nott. In Nott the debtor received an inheritance from her mother one year after the debtor’s Chapter 13 case had been confirmed. The court held that that the debtor’s receipt of an inheritance after the initial confirmation of a Chapter 13 plan may be captured for the benefit of creditors at the confirmation of a modified plan under § 1329.

Based on this your BK trustee may require that you pay all the inheritance amount into your Chapter 13 plan.

I am sorry. I know this is not what you wanted to hear; but I am assuming that you are paying for an honest and professional answer.