The first part of the article on inheritances received postpetition, or after the filing of a bankruptcy case, addressed some basics and what happens to such inheritances in Chapter 7 cases. Under 11 U.S.C. § 541, Chapter 7 debtors are fairly safe since this property does not become part of the bankruptcy estate once 180 days have passed since the filing of the bankruptcy petition.
The filing of a bankruptcy petition creates a bankruptcy estate. 11 U.S.C. § 541 of the Bankruptcy Code provides what constitutes property of the bankruptcy estate. It is this estate, or pool of assets, that is used to satisfy the claims of creditors.
However, Chapter 13 debtors are not as lucky as Chapter 7 debtors since the definition of property of the estate in a Chapter 13 case is broader than § 541′s definition. 11 U.S.C. § 1306 provides that property of the estate in a Chapter 13 case includes the following, in addition to the property specified in § 541:
(1) all property of the kind specified in such section [§ 541] that the debtor acquires after the commencement of the case but before the case is closed, dismissed, or converted to a case under chapter 7, 11, or 12 of this title, whichever occurs first.
Thus, any property received after commencement, but before the cases is closed, is generally part of a Chapter 13 debtor's bankruptcy estate.
In 2002, the Middle District of Florida decided that a $300,000 inheritance received by a Chapter 13 debtor postconfirmation, or after the Chapter 13 plan had been confirmed, was property of the debtor's bankruptcy estate. "This Court finds that property of a chapter 13 estate that is in existence and disclosed as of the date of confirmation vests in the Debtor pursuant to § 1327(b). Any property acquired postconfirmation, however, is property of the estate pursuant to § 1306(a)." In Re Nott, 269 B.R. 250, 257 (Bankr. M.D. Fla. 2000).
Nott was cited by the 11th Circuit Court of Appeals, which decided In Re Waldron, 536 F.3d 1239 (11th Cir. 2008), where the court held that "assets acquired (in this case, uninsured motorist benefits) after confirmation of the bankruptcy plan are property of the bankruptcy estate pursuant to 11 U.S.C. § 1306(a).” Thus, even if an inheritance is received more than 180 days after filing a Chapter 13 case, it will become part of your bankruptcy estate, and used to satisfy the claims of the creditors, unless it has vested previously at the time of confirmation.The experienced South Florida defense attorneys at Loan Lawyers are here to review your potential claims against a debt collector, and will help you recover the damages you deserve. To schedule a free consultation at any of our three conveniently located offices, contact Loan Lawyers today by calling (888) FIGHT-13 (344-4813).