What is the 180-Day Rule?
In many different areas of the law, there is a rule known as the “180-day rule.” There is a 180-day rule in immigration law, as well as in criminal law in a number of jurisdictions. There is also a 180-day rule when it comes to U.S. bankruptcy law, and that is the rule we want to discuss with you today. In bankruptcy law, the 180-day rule applies to consumer bankruptcy cases when a debtor is expecting to receive an inheritance, a cash gift, or another payout during the bankruptcy process. The 180-day rule clarifies when that money will need to go into the bankruptcy estate and when the debtor will be able to keep the money.
If you have questions about the 180-day rule, or if you are planning to file for bankruptcy but also know you will soon be receiving an inheritance or another type of cash gift, you should seek advice from an Oak Park bankruptcy attorney about how that money will affect your case.
Understanding the 180-Day Rule
In U.S. bankruptcy law, the 180-day rule says that if a debtor receives any money within 180 days of filing for consumer bankruptcy, then that money must be disclosed to the bankruptcy trustee and will need to become part of the bankruptcy estate unless the debtor can exempt the money with one of the Illinois bankruptcy exemptions. Generally speaking, money that a person receives more than 180 days after filing for bankruptcy will not need to be disclosed and will not become part of the bankruptcy estate.
While the 180-day rule most frequently gets discussed in relation to inheritances, there are other types of money or cash gifts for which the 180-day rule may be applicable. For example, if you receive a life insurance or death benefit payout, a monetary damages award from a settlement in a personal injury or divorce case, a friend or family member gives you a cash gift, or you win money in a contest or the lottery, then the 180-day rule may apply.
How the 180-Day Rule Understands the Timing for “Receiving” Money
The date at which a debtor who has filed or is planning to file for bankruptcy receives an inheritance or another type of cash gift or settlement is usually the date that the person learns that they will receive that money. In the case of an inheritance, for instance, the date that a debtor receives notice that they will be receiving the inheritance is the date of receiving the money for purposes of the bankruptcy case and the 180-day rule, as opposed to the date that the debtor actually sees the money in his or her bank account.
Chapter 7 Versus Chapter 13 Bankruptcy
The 180-day rule is especially relevant for anyone who is filing for Chapter 7 bankruptcy. In a Chapter 13 bankruptcy case, the rule may still be applicable, but the debtor would not turn the money over to the bankruptcy estate. Instead, the debtor’s repayment plan amounts may go up based on the amount of the inheritance. In a Chapter 13 bankruptcy case, the 180-day rule may not necessarily apply in the same way. You should seek advice from a lawyer if you are planning to file for Chapter 13 bankruptcy, or if you will be receiving an inheritance and are in the middle of a Chapter 13 repayment plan.
Seek Advice from Our Oak Park Bankruptcy Lawyers
Do you need assistance with your bankruptcy case, or do you have questions about the 180-day rule? One of our experienced Oak Park bankruptcy attorneys can speak with you today. Contact the Emerson Law Firm for more information.
See Related Blog Posts:
Illinois Federal Judges Rule on FDCPA Violations and Injuries
Inheritances and Chapter 13 Bankruptcy Cases
If you have questions about the 180-day rule, or if you are planning to file for bankruptcy but also know you will soon be receiving an inheritance or another type of cash gift, you should seek advice from an Oak Park bankruptcy attorney about how that money will affect your case.
Understanding the 180-Day Rule
In U.S. bankruptcy law, the 180-day rule says that if a debtor receives any money within 180 days of filing for consumer bankruptcy, then that money must be disclosed to the bankruptcy trustee and will need to become part of the bankruptcy estate unless the debtor can exempt the money with one of the Illinois bankruptcy exemptions. Generally speaking, money that a person receives more than 180 days after filing for bankruptcy will not need to be disclosed and will not become part of the bankruptcy estate.
While the 180-day rule most frequently gets discussed in relation to inheritances, there are other types of money or cash gifts for which the 180-day rule may be applicable. For example, if you receive a life insurance or death benefit payout, a monetary damages award from a settlement in a personal injury or divorce case, a friend or family member gives you a cash gift, or you win money in a contest or the lottery, then the 180-day rule may apply.
How the 180-Day Rule Understands the Timing for “Receiving” Money
The date at which a debtor who has filed or is planning to file for bankruptcy receives an inheritance or another type of cash gift or settlement is usually the date that the person learns that they will receive that money. In the case of an inheritance, for instance, the date that a debtor receives notice that they will be receiving the inheritance is the date of receiving the money for purposes of the bankruptcy case and the 180-day rule, as opposed to the date that the debtor actually sees the money in his or her bank account.
Chapter 7 Versus Chapter 13 Bankruptcy
The 180-day rule is especially relevant for anyone who is filing for Chapter 7 bankruptcy. In a Chapter 13 bankruptcy case, the rule may still be applicable, but the debtor would not turn the money over to the bankruptcy estate. Instead, the debtor’s repayment plan amounts may go up based on the amount of the inheritance. In a Chapter 13 bankruptcy case, the 180-day rule may not necessarily apply in the same way. You should seek advice from a lawyer if you are planning to file for Chapter 13 bankruptcy, or if you will be receiving an inheritance and are in the middle of a Chapter 13 repayment plan.
Seek Advice from Our Oak Park Bankruptcy Lawyers
Do you need assistance with your bankruptcy case, or do you have questions about the 180-day rule? One of our experienced Oak Park bankruptcy attorneys can speak with you today. Contact the Emerson Law Firm for more information.
See Related Blog Posts:
Illinois Federal Judges Rule on FDCPA Violations and Injuries
Inheritances and Chapter 13 Bankruptcy Cases
Comments
Post a Comment