What do you do with an inheritance received two years after Ch 13 filing?

Answer 1

If the Chapter 13 has been discharged for 2 years, then one normally doesn't have to do anything since 11 U.S.C. § 541 (a)(5) states that "(a) The commencement of a case under section 301, 302, or 303 of this title creates an estate. Such estate is comprised of all the following property, wherever located and by whomever held: (5) Any interest in property that would have been property of the estate if such interest had been an interest of the debtor on the date of the filing of the petition, and that the debtor acquires or becomes entitled to acquire within 180 days after such date— (A) by bequest, devise, or inheritance; (B) as a result of a property settlement agreement with the debtor’s spouse, or of an interlocutory or final divorce decree; or (C) as a beneficiary of a life insurance policy or of a death benefit plan." This Code section implies that only inheritance received within 180 days after Discharge has to be brought to the attention of the trustee. However, if the Chapter 13 is still active, then one should bring the inheritance to the attention of their attorney since the Chapter 13 trustee normally pursues all or a portion of the inheritance to distribute to creditors through the Plan. Failure to report the asset could mean big trouble for the debtor. Please note that nothing in this posting or in any other posting constitutes legal advice; this is simply my understanding of the facts, which I do not warrant, and I am not suggesting any course of action or inaction to any person.