Reed Law Firm, P.A. is a federally designated debt relief agency. We proudly help people file for bankruptcy relief under the U.S. Bankruptcy Code.
image description
Giving You Hope For a Debt-Free Future

SOUTH CAROLINA
BANKRUPTCY ATTORNEY

How an inheritance can affect a Chapter 7 bankruptcy

For many South Carolina consumers, the timeframe leading up to filing for bankruptcy can be hectic and stressful. For some, a death in the family adds to that stress. When an inheritance is expected just prior to filing for Chapter 7 bankruptcy, many people are unsure how that change will affect their overall financial scenario, and whether or not they will be able to keep their inheritance once the bankruptcy process begins.

If the bankruptcy has not yet been filed, it is entirely possible to retain the inheritance and still move forward with the bankruptcy process. The timing here is important, because once the bankruptcy is filed, any and all assets must be listed, and an inheritance is certainly considered an asset. In this way, individuals who receive an inheritance while their bankruptcy is in progress stand a real chance of losing that asset to creditor repayment.

As to how the inheritance can be spent, it is important to make decisions that are reasonable and within the letter of the law. It is perfectly acceptable to use that money on things that one's family needs. Examples include funding a retirement account or purchasing life insurance. It would also be acceptable to buy a used vehicle or pay for rent or utilities.

The money cannot be spent in an irresponsible manner, or hidden. For example, it is not permissible to give the money away to friends or family, or to simply convert it to cash and tuck it away for a rainy day. The expenses must be reasonable, and must go directly toward your family's needs.

When dealing with an inheritance at the onset of Chapter 7 bankruptcy, the best course of action is to determine how the asset can be utilized in a way that conforms to the law. Making the proper decisions on how to spend the inheritance and when to file for bankruptcy can make a great deal of difference in the bottom line. As with so many aspects of life, timing truly is everything when it comes to a South Carolina inheritance and bankruptcy.

Source: foxbusiness.com, "Will Bankruptcy Affect Inheritance Money?" Justin Harelik, Feb. 19, 2013

No Comments

Leave a comment
Comment Information

Contact Us

For more information or to schedule an appointment with an experienced lawyer regarding a bankruptcy filing, please contact us.

image description

COLUMBIA OFFICE
220 Stoneridge Drive,
Suite 301
Columbia, SC 29210
Phone: 803-807-2565
Fax: 803-726-4887
Email | Map & Directions

FLORENCE OFFICE
1807 West Evans Street,
Suite B
Florence, SC 29501
Phone: 843-679-0077
Fax: 843-679-0667
Email | Map & Directions

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

image description

Reed Law Firm, P.A.
220 Stoneridge Drive,
Suite 301

Columbia, SC 29210

Phone: 803-726-4888
Fax: 803-726-4887
Columbia Law Office Map

Reed Law Firm, P.A.
1807 West Evans Street,
Suite B

Florence, SC 29501

Phone: 843-679-0077
Fax: 843-679-0667
Florence Law Office Map

Reed office

‚Äč