Expert: Terry Leeders - 4/23/2007

Question
First of all I would like to thank you for your time. My question is two fold.  First, my husband and I filed Chapter 7 for the business we owned and because the loan for the business was tied in with our mortgage, we had to file personal bankruptcy also.  We filed in March and the debts were discharged in October 2006.  Our accountant filed an extension on our income taxes because he said he has to research it because the $100,000 SBA loan we had for the business which was discharged will have to be added to our personal income. The second part of my question is - my mom passed away in January of 2007.  I will be receiving an inheritance from her estate and people have told me that the creditors can come back and file a claim for the money I receive.  Is this true?  I'm sorry this seems so lengthy, I just keep hearing different things from different people.  I don't know what to believe.  Thank you so much for your time.

Answer
You have a duty to notify the trustee of any inheritance.  This duty lasts for 6 months (180 days).  You should contact your attorney so she can notify the trustee and advise you on the issue.

You should also talk to your tax expert, because once a debt is discharged, it is not income to you.  If the company forgave debt- ie. settled for less, then that can be construed as an income transaction.