I am in a Chapter 7 and I am getting a large sum of money. Dont I get to keep this?
The simple answer is, it depends. First it matters where the money is coming from and when you become entitled to the money.
For example, if the money is from an inheritance and the person died before you filed the Chapter 7 or within 180 days from when the Chapter 7 was filed then chances are that it is part of the bankruptcy estate and the money would need to be turned over to the Chapter 7 trustee to be disbursed to your unsecured creditors. However, if the money is from something, other than an inheritance, that you became entitled to after filing, that it is likely not part of the bankruptcy estate.
If it is determined that the asset is a part of the bankruptcy estate, clients usually want to know why they have to turn over the money and what will happen if they do not turn over the money. First, the trustees job is to essential be the middle man between you and your creditors. The trustee is supposed to look for assets that could pay off all or some of your creditors. Second, as to what will happen if you do not turn over the money; that part is simple. The trustee can dismiss your case or deny or revoke your discharge. Therefore, it is crucial that any property that is determined to be part of your bankruptcy estate is turned over to the trustee unless otherwise ordered by the court.
Determining which assets are part of your bankruptcy estate can be difficult. Before spending any money that may be part of your bankruptcy estate, contact your bankruptcy attorney. If you are considering filing bankruptcy, contact our office for a free consultation.