The lawyers at Sawin & Shea have experience at understanding the light in the dark, particularly when it comes to receiving an inheritance amidst a Chapter 7 bankruptcy or a Chapter 13 bankruptcy. Each type of bankruptcy has a different approach to inheritances, and it’s vital to understand these distinctions if you are navigating the inheritance-bankruptcy terrain.

What Is the Chapter 7 Approach to Inheritance?

You just filed your Chapter 7 bankruptcy a month ago, and now you receive word that your aunt has passed away, leaving you an inheritance. What should you do? The first step is to contact your bankruptcy attorney and disclose that you’ve received an inheritance.

During this communication, you will be consoled on your loss and counseled on the proper inheritance-bankruptcy protocol. The magic words in this situation are “180 days.” If you become entitled to an inheritance within 180 days of filing, the inheritance, unfortunately, becomes part of your bankruptcy estate, regardless if you claim it after 180 days.

You could have received property or money from a life insurance policy or death benefit plan. Your appointed trustee and the court consider any form of inheritance an asset that can be liquidated and used to pay your creditors. Any remainder, if any, of your inheritance will go to you after creditors are paid.

If you become entitled to your inheritance after the 180-day timeframe, the trustee cannot claim your inheritance, and your aunt’s gift will go to you.

What Is the Chapter 13 Approach to Inheritance?

Comparable to a Chapter 7 bankruptcy, a Chapter 13 bankruptcy proceeding considers an inheritance part of your bankruptcy estate if you become entitled to it within that same 180-day timeframe. Your trustee will mandate a payment to your creditors that is equal to your inheritance amount.

Different from Chapter 7, if you become entitled to the inheritance after 180 days of filing, you may still be required to treat the inheritance as an asset. It all depends on the court. Some courts have ruled that the inheritance is still part of the estate, even after 180 days; others argue it does not apply, leaving you free to inherit the funds. At Sawin & Shea, we understand local court rules and will advise you accordingly should you receive an inheritance after 180 days.

Another difference between Chapter 7 and Chapter 13 is that your property is not liquidated and dispersed to creditors. So, if your inheritance is in the form of property, you can keep your loved one’s gift. It’s important to note, however, that this may increase your monthly payment amount, as most Chapter 13 bankruptcy plans have a 3-5 year repayment plan.

What Happens If I Don’t Report an Inheritance?

While we are forgiving of mistakes, the courts rarely are. If you have not disclosed an inheritance to the court, you could face severe consequences in the form of large fines, case dismissal, or fraud charges.

At Sawin & Shea, we encourage our clients to be open and honest about all debt and assets during a bankruptcy proceeding. We are on your side and will fight for your right to an inheritance, should it meet the right criteria.

How Can Sawin & Shea Help?

Receiving an inheritance during bankruptcy produces both hope and uncertainty, which can create a confusing path forward. With over 75 years of bankruptcy service experience, Sawin & Shea can pave that path for you with bricks of compassion, aptitude, and dependability.

Please do not hesitate to call us today at 317-759-1483 or send an email for a free consultation. We are ready to help.

The post Inheritance and Bankruptcy appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

How Do I Protect My Home During Bankruptcy?

During your bankruptcy, you can protect your home in two main ways. The first is through a homestead exemption, which covers residential real estate equity (what you own of your house when you consider what you owe against it) up to a certain amount. In Indiana, a debtor filing for Chapter 7 bankruptcy can protect up to $19,300 per person in residential real estate or mobile home. There is also a personal property exemption that protects equity in nonresidential real estate and personal property up to $10,250.

Another route to protecting your home is to use bankruptcy to halt a foreclosure, which is usually possible all the way up to the point of a sheriff’s sale. So if you’re about to lose your home, you may be able to use bankruptcy to stop the process.

How Can I Protect My Personal Property?

If you have personal property, you’d like to save during a Chapter 7 bankruptcy, there is a personal property exemption of up to $10,250 per person to protect it. This covers the (liquidation) value of your household goods, furniture, electronics, clothing, and equity in your vehicle. It is rare that there is a problem with a person having too much personal property. The other main category of exemptions is called intangible assets. This would include cash or cash equivalents such as bank accounts, claims against others for damages, bank accounts, non-retirement stock or bond holdings, tax refunds, and money people owe you. We can held each person in a bankruptcy hold onto $400 of intangibles available on the date the case is filed. In addition, there are exemptions for health aids, retirement plans, health savings accounts, spendthrift trusts and military equipment and others.

Do Exemptions Automatically Protect My Property?

Here’s something many people don’t realize: Exemptions are not automatic. Your belongings won’t automatically be protected, even if you qualify for exemptions. To ensure your property is covered by exemptions, you must apply for them when you file your other bankruptcy paperwork. A bankruptcy attorney can help you understand your exemption options and file for them efficiently and correctly.

Can Anyone Object to My Exemptions?

An interim bankruptcy trustee will review your exemptions and see if they are allowable under bankruptcy law. Usually, they will work with you to ensure you receive the right exemptions. But if they believe you are being deceptive or trying to use exemptions in bad faith, they may file an objection with the court to deny them. Seek the advice of a bankruptcy attorney who can help you use Indiana exemptions successfully.

What if I Have Assets that are Not Exempt?

If you have assets that exceed the allowed exemptions, your attorney will discuss options, such as a Chapter 13 bankruptcy, that can help you hang onto items that might be taken for the benefit of your creditors in a Chapter 7.

Sawin & Shea – Indianapolis Bankruptcy Attorneys

Filing for bankruptcy is not the end. It’s the beginning of a new financial life for you. The Indiana bankruptcy attorneys at Sawin & Shea can help you get rid of the overwhelming debt and advise you on life after bankruptcy.  We are here for you during this life-changing process. Please do not hesitate to call us today at 317-759-1483 or send an email for a free consultation. We are ready to help.

The post Can I Protect My Home and Personal Property in Bankruptcy? appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

Am I Going to Lose My Inheritance in Bankruptcy?

Even though every person’s financial circumstances are unique, generally speaking, it’s possible to lose an inheritance during bankruptcy unless it is protected by a state or federal exemption. If you have already inherited money or property before filing a bankruptcy, the assets that you hold can have a direct effect on a bankruptcy. If you become eligible to receive an inheritance within 180 days after filing, in most cases, it can be seized by a trustee and used to pay your creditors. The timing is based on the date of death of the person leaving you the inheritance, so it doesn’t matter if you have actually received the inheritance or not. In addition, if you inherit a house or other personal property, its value may determine what you must pay back to your creditors.

Is Chapter 13 Different From Chapter 7 With an Inheritance?

It does make a difference whether you are filing under Chapter 13 or Chapter 7 bankruptcy. After the 180-day post-filing mark, the bankruptcy trustee isn’t generally permitted to take your inheritance in Chapter 7 bankruptcy. But, in a Chapter 13, your inheritance may have an effect on what you have to pay back to creditors via your reorganization plan. All cases are different, so an experienced bankruptcy attorney can help advise you as to your particular situation.

Is There Any Way to Avoid Losing My Inheritance?

You can protect your inheritance by using a bankruptcy exemption that either protects inheritances specifically. This is most notable with regards to inheritances between spouses. Talk to your bankruptcy attorney about the options. Another possible way to avoid losing an inheritance is to receive it as a revocable living trust. Seek legal advice before going this route.

What If I Don’t Report the Inheritance to the Bankruptcy Trustee?

If you receive an inheritance before, during or after you declare bankruptcy, don’t be tempted to hide it from the bankruptcy trustee. This could be considered bankruptcy fraud, which is a reason for your discharge in bankruptcy to be denied. It can even result in federal criminal fraud charges and jail time. Instead, consult with an experienced bankruptcy attorney who can advise you on the best path forward.

Sawin & Shea – Indianapolis Bankruptcy Attorneys

Filing for bankruptcy is not the end. It’s the beginning of a new financial life for you. The Indiana bankruptcy attorneys at Sawin & Shea can help you get rid of the overwhelming debt and advise you on life after bankruptcy.  We are here for you during this life-changing process. Please do not hesitate to call us today at 317-759-1483 for a free consultation. We are ready to help.

The post If I Declare Bankruptcy, Will I Lose My Inheritance? appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

When you file for a Chapter 7 bankruptcy in Indiana the law provides for bankruptcy exemptions for real and personal property that you can keep. A Chapter 7 bankruptcy is a liquidation. This means that the court is looking for non-exempt stuff that you own that they could sell to make some money to pay your creditors something. This doesn’t mean you should give up on saving your assets when you file for bankruptcy. Indiana’s exemptions can be used to protect your home, insurance benefits, retirement funds, sentimental items, and more. Here’s how bankruptcy exemptions work in the state of Indiana.

How Does A Bankruptcy Exemption Protect My Home?

Indiana’s homestead exemption is $19,300 of equity per filer. The frustrating part is that $19,300 isn’t much home value. If you’ve already paid off the mortgage on a $100,000 home, it would be heartbreaking to lose it. Even the family cabin your grandfather built with his own two hands could be sold at auction. However, don’t let this put you off filing for bankruptcy. Your attorney can help you use exemptions to protect your assets. If you select Chapter 13 bankruptcy, you might have a good shot at saving your home.

Does Indiana Have an Auto Exemption?

The answer to this is both yes and no. Unlike many states, Indiana does not have a specific exemption for motor vehicles of any kind. However, you can use Indiana’s personal property exemption to protect up to $10,250 in personal property, including equity in a vehicle.

What is The Personal Property Exemption?

In Indiana, the personal property exemption can be used to protect personal property up to a value of $10,250 during bankruptcy. This includes equity in non-residential real estate, vehicles, work gear, personal possessions and most other kinds of tangible property. Use this exemption to prevent losing cash and treasured valuables like art, jewelry or a collection of memorabilia.

Are There Other Types of Exemptions in Indiana?

There is an intangible asset exemption that protects up to $400 per filer in cash or cash equivalents such as money in bank accounts at the time of filing. Indiana also has other types of exemptions that protect specific kinds of assets. An Insurance Benefits exemption can protect life and accident insurance policy values. Pension and retirement benefits can usually be protected, too. Workers’ compensation and unemployment benefits are 100% exempt in Indiana. You can usually save 75% of earned but unpaid wages, or 30 times the Federal minimum wage. If you’re concerned about keeping your wages, benefits and other assets, speak to a bankruptcy attorney as quickly as possible.

Sawin & Shea – Indianapolis Bankruptcy Attorneys

Filing for bankruptcy is not the end. It’s the beginning of a new financial life for you. The Indiana bankruptcy attorneys at Sawin & Shea can help you get rid of the overwhelming debt and advise you on life after bankruptcy.  We are here for you during this life-changing process. Please do not hesitate to call us today at 317-759-1483 or send an email for a free consultation. We are ready to help.

The post How Does Indiana’s Bankruptcy Exemption Work? appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.