The Trustee’s Rights During the Six Month
Period Following Discharge

  In most cases, your Chapter 7 bankruptcy case will be “over” when the bankruptcy judge issues a discharge and you receive notice from the clerk of court that your case has been closed.  But is that “fresh start” absolute - can anything unexpected happen after discharge?

  The Bankruptcy Code provides that under certain circumstances, money received by the debtor within the six month period following discharge belongs to the bankruptcy estate and can be seized and liquidated by the trustee.

  The most common situation in which the trustee will go after post discharge assets is when the debtor inherits money during the six month period following the discharge.  This is why your Chapter 7 trustee usually asks at the 341 hearing is you have inherited any money or if you expect to inherit any money.

  Inheritance issues can be very tricky.  If you are thinking about filing for bankruptcy and you believe that you might be in line for an inheritance within the next year or so, make sure to reveal this to your attorney.  You may need to get advice from an estate planning lawyer.

  If a relative unexpectedly dies during the six month period following your bankruptcy, you should contact our office immediately to discuss your obligations and options.

  Your Chapter 7 trustee may seek to enforce the bankruptcy estate’s claim on any funds that unexpectedly come to you during the six month period following bankruptcy.  Lottery winnings, large bonuses, unexpected gifts could all give rise to a claim by the trustee.  If you have any questions about this type of issue, please call our office for a confidential consultation.  As difficult as it may be to lose out on an unexpected windfall, your failure to comply with the requirements of the bankruptcy code could subject you to civil penalties or even federal prison.