(This week, I’m using readers’ experiences to help answer other Bankruptcy in Indiana readers’ questions.)
When it comes to what-do-I-get-to-keep questions about personal bankruptcy in Indiana, I’m one of the right people to ask, since I helped write the exemptions portion of Indiana bankruptcy law. Still, each situation is slightly different, and sometimes it’s up to the bankruptcy court to decide one way or another.
As a reminder, one part of filing either individual bankruptcy in Indiana or Indiana small business bankruptcy is filling out a list of all assets and all debts. In fact, a very large portion of the work I do involves helping debtors gather and properly categorize and report the information on that bankruptcy paperwork. Those forms then become the “script” for the 341 Creditors Meeting that is part of every bankruptcy.
So far, so good. But, what if there’s a possibility the debtor might be coming into some money soon, say from a tax refund, an inheritance, or perhaps a settlement from a pending lawsuit? That’s one question my Columbus bankruptcy lawyer colleagues say they hear a lot, in fact.
Over my more than 25 years as a debt consolidation lawyer offering bankruptcy services in Indiana, I’ve learned that the answers need to begin with the two words “It depends”. On what?
On WHEN you get the money. According to Indiana bankruptcy law or federal law, a debtor who inherits money from someone who dies within 180 days of the time he/she filed bankruptcy may have to turn over that inheritance as part of the bankruptcy estate. And, yes, that money will need to go towards paying creditors. (There may be an exception if the inheritance is in a trust or is life insurance.)
On WHEN you know, or can be reasonably sure, you’re getting money. So if you expect to be receiving a settlement from a lawsuit, or know an inheritance is in the works, or you/ve applied for a tax refund, that information must be disclosed. I once described this rule as follows: “The bankruptcy court needs to know, not only about the birds in your hand, but the ones in the bush as well.”
Categorised in: Bankruptcy Indiana
This post was written by Mark Zuckerberg