Bankruptcy and Gifts
What is the law governing bankruptcy and gifts?Bankruptcy is when a person has more debts than he/she can pay seeks relief in federal bankruptcy court. The filing of bankruptcy is a means in which a person can have a financial clean slate. Chapter 7 bankruptcy is the most common type of bankruptcy and when a person files for this type of bankruptcy, they are known as a debtor and they have a trustee who sells off their property to pay the debts in which they have. Chapter 13 bankruptcy is the type of bankruptcy that a person files, and still makes payments on the debts that he/she has. When a person files for bankruptcy they have to claim all of their property and assets, except when a person has already given the property and assets to someone as a gift.
Can a person’s step parent claim a child’s gift of property from a deceased parent in their bankruptcy?If the child has proof that the property was given to them from the deceased parent as a gift, then the child should be able to get the property discharged from the bankruptcy estate due to the fact that the property is a separately owned property than the stepparent has. The child would have to take the concerns to court.
When a person files for bankruptcy, can they accept gifts from friends?When a person files for bankruptcy they do not have to report certain things to the trustee, including certain gifts received. The person has the right to receive after a material settlement, and inheritance, or death benefits or life insurance policy proceeds, and these should only be reported if the person receives those within 180 days of filing the bankruptcy.
In the state of California, how long does the court look back when it comes to a gift to a family member?In the state of California, when a person files for bankruptcy and has a loan, weather it is to a relative or a friend, there is no set amount if time the courts will look back upon the debt. When there is a gift involved, then the courts will look back 2 years.
When a person finds out they are entitled to an inheritance after they finish bankruptcy, what are the rules regarding this?The rules regarding gifts are as follows; cash gifts that the person receives after filing for bankruptcy do not become a part of the bankruptcy estate. If the person purchases a lottery ticket before filing for bankruptcy, the winnings become a part of the bankruptcy estate, but if the person purchases the lottery ticket after the bankruptcy is filed and wins, then those monies do not become a part of the bankruptcy estate. If the person becomes entitled to an inheritance within 90 days after the bankruptcy, then the monies become a part of the bankruptcy estate, but if the person becomes entitled to the monies after 90 days then it would not become a part of the bankruptcy estate.
Bankruptcy is a way for a person to clean up his/her debts, and when the person gives or receives gifts during, before, or after a bankruptcy, then the person may face issues regarding the bankruptcy rules. When you are faced with such situations and are not sure of your rights, you should ask an Expert for legal insights based on an evaluation of the particulars of your case.