After finalizing Chapter 13, if a person should receive a cash gift or inheritance, would these assets be protected from creditors?
Chapter 13 has been filed and finalized - 9 months later a relative gives a cash gift in the form of a certificate of deposit to the bankrupt party, would this newly acquired asset be protected from the creditors or would they have a legal right to lay claim to them?
I'm not sure what you mean by "finalized". If you mean the discharge has been entered and case closed, then there's no problem receiving anything. If you're talking about the case having just commenced and the plan was confirmed, that's a completely different story. Cash gifts are never an issue because they are voluntary and don't affect anything. An inheritance is different. If the debtor became entitled to receive the inheritance within 180 days after the case was filed, then it must be included in the asset base on which the plan payments are calculated.
Mark J. Markus, Attorney at Law
Handling exclusively bankruptcy law cases in California since 1991.