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Making the difficult decision to file for bankruptcy involves a lot of thought. But when you are in a position in which you have mounting debt and lack the finances to pay anything off, it can sometimes be the right option for you. Filing for either Chapter 7 or Chapter 13 bankruptcy can help you get your financial health on the right path.
But filing for bankruptcy can also be complicated. At times it can lead to serious issues, requiring you to lean on different sources of income in order to pay off as much of your debt as possible.
The Bankruptcy Estate
The income that you bring in the 180 days following your bankruptcy filing will become part of your bankruptcy estate. This also includes income/assets that you inherit. If you inherit property because your loved one dies during the 180-day period, that inheritance becomes part of the bankruptcy estate – whether or not you actually receive it during that time as well.
Any inheritance that you receive within the 180-day period must be shared with the bankruptcy trustee. Additionally, you will need to amend specific bankruptcy forms, which will depend upon the type of asset that’s been inherited.
Bankruptcy Exemptions
However, any assets that are covered by any bankruptcy exemptions can be kept. In Texas, you may retain up to a certain value of cash, vehicles, jewelry, household items, some animals, equipment and tools, up to two firearms, and home equity. You are also entitled to $1,250 worth of other property.
If your spouse is the one who receives an inheritance, whether or not he or she can keep it is first dependent upon whether the two of you filed for bankruptcy together. If you and your spouse filed separately, their inheritance is not included in your bankruptcy estate. But if you do file together, it will be included in your bankruptcy estate. Since income earned during those 180-days will become part of your bankruptcy estate, it’s in your best interest – and your spouse’s – to keep any inheritance separate for the time being.
Toronjo & Prosser Law Helps Those Who Are Dealing with Bankruptcy
It’s undoubtedly stressful to realize that you don’t have enough money, and even more stressful when you realize that filing for bankruptcy may be your best option. The process of filing for bankruptcy can be extremely complex and confusing.
When you are going through the bankruptcy process, it’s in your best interest to consult with a knowledgeable and experienced Texas bankruptcy attorney. He or she can help you to identify important documents needed to file for bankruptcy as well as help you to avoid mistakes that could really cost you.
At Toronjo & Prosser, our qualified Dallas Bankruptcy Attorneys can help you to navigate the process. To learn more or to schedule a free consultation contact us online or call us today!