Oak Park Real Estate & Estate Planning Blog

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 tha...

If you recently received an inheritance, or if you know you may be receiving an inheritance soon, you should know that it may impact your Chapter 13 bankruptcy case . Yet the way an inheritance will affect a Chapter 13 bankruptcy case is much different than how it will affect a Chapter 7 bankruptcy case. In Chapter 7 cases, courts need to know about all assets to properly classify them as exempt or non-exempt, and non-exempt assets will be liquidated in order to repay creditors and to discharge debts. In Chapter 13 cases, assets also must be properly classified as exempt or non-exempt, but assets are not liquidated. Instead, whether or not assets are exempt will affect the debtor’s Chapter 13 debt reorganization and the repayment plan. Given the ways in which exempt and non-exempt assets are relevant to a Chapter 13 bankruptcy case, you may not be surprised to learn that an inheritance will not be distributed immediately to creditors the way it would in a Chapter 7 case. Instead, an i...