Expert: Terry Leeders - 4/9/2009

Question
My grandmother died the day before our chapter 7 bankruptcy petition was officially filed (we had started the process about 1 1/2 weeks before).  At the time I was not expecting an inheritance from her.  I have recently found out that since my father passed away before his mother I am going to receive a portion of his share of her estate.  It is mostly real estate that is to be sold and some that the will stipulates can't be sold for 13 years.  What are my obligations as far as my bankruptcy is concerned?  Is any of this considered protected assets?  When is something considered "inherited", the day you receive it or the day the person leaving it dies?  Would it be better to withdraw the bankruptcy petition and deal with the creditors myself?  

We have already had one hearing with the trustee.  Your expedient reply is greatly appreciated.

Answer
You will need to list this inheritance in the case (or amend schedules if already filed) These are not usually protected, unless your state offers exemptions that could cover them.  To protect the asset, if you don't have exemptions available, you need to look at a chapter 13 to pay back enough of your debt to protect the asset.  Inheritances need to be disclosed for 6 months after the bankruptcy as well, so the timing in this case is not an issue.  You have an equitable interest as of the date of death.  You need to talk to your lawyer to decide what to do. Dismissal isn't always available if there are assets involved.