Filing for bankruptcy can feel like hitting the reset button on your finances. But what happens if, after you file, you unexpectedly inherit money or property? Many people worry that an inheritance could undo the relief bankruptcy is meant to provide. The answer depends on timing, the type of bankruptcy filed, and Pennsylvania bankruptcy rules.

At Tadross Law, we can provide legal assistance to individuals throughout Pennsylvania who are navigating bankruptcy concerns, including how an inheritance may affect their case.

Understanding Timing and Bankruptcy Filings

One of the most important factors is when you receive or become entitled to the inheritance. In bankruptcy, the court looks closely at timing to decide whether inherited assets become part of the bankruptcy estate.

If you become entitled to an inheritance shortly after filing, it may still be relevant to your case. The rules differ depending on whether you filed under Chapter 7 or Chapter 13.

Inheriting Money After Filing Chapter 7 Bankruptcy

In a Chapter 7 bankruptcy, there is a key 180-day rule. If you become entitled to an inheritance within 180 days after filing your case, that inheritance may be considered part of the bankruptcy estate. This means it could potentially be used to pay creditors.

If the inheritance occurs more than 180 days after filing, it typically does not affect your Chapter 7 case. However, you are still required to disclose the inheritance if it falls within that six-month window.

Inheriting Money During a Chapter 13 Bankruptcy

Chapter 13 cases work differently because they involve a repayment plan that lasts three to five years. If you inherit money at any point during your Chapter 13 case, the trustee may review whether the inheritance impacts your ability to repay creditors.

In some situations, the court may require changes to your repayment plan, especially if the inheritance significantly improves your financial situation.

The Importance of Disclosure

Transparency is critical in bankruptcy. If you receive or expect to receive an inheritance, you must inform your bankruptcy attorney and trustee. Failing to disclose an inheritance can lead to serious consequences, including dismissal of your case or other penalties.

Being proactive allows your attorney to help protect your rights while keeping your case compliant with bankruptcy laws.

How Pennsylvania Bankruptcy Law Applies

Bankruptcy is governed by federal law, but exemptions and practical outcomes can vary by state. Pennsylvania exemption rules and local court practices can affect whether inherited property is protected or must be used to satisfy debts.

Understanding how these rules apply to your specific situation is essential before making decisions about inherited assets.

Getting Guidance Before It Becomes a Problem

An inheritance does not automatically cancel your bankruptcy, but it can change how your case proceeds. With the right guidance, many people are able to handle an inheritance without losing the financial relief bankruptcy provides.

At Tadross Law, we can provide legal assistance to Pennsylvania residents who have questions about bankruptcy, inherited assets, and how to move forward with confidence.