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Are inherited assets subject to forfeiture in bankruptcy? Atlanta, GA

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Are inherited assets subject to forfeiture in bankruptcy?

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There are many important issues to consider when assessing whether or not to file for Chapter 7 or Chapter 13 personal bankruptcy. The first and most important is obviously the level of debt compared with income, since bankruptcy laws require specific minimum standards in order to be eligible for debt restructuring or debt forgiveness.

In addition to income from work or from investments, it is also important to examine the full scope of assets that one holds before deciding to file for bankruptcy. When making this assessment, people often face confusion about inherited assets, such as a trust.

Whether or not a trust can be accessed by creditors to satisfy a debt depends on a variety of complex factors. The most important factor is whether or not the assets in the trust are accessible to the person filing for bankruptcy at the time of the filing. Having an accessible asset means that the person has control of the contents of the trust at that moment, so, for example, they could withdraw cash from the trust if it holds any, or immediately transfer their interest in a parcel of land. If that is the situation, then a creditor would likely be able to access the trust’s assets for purposes of satisfying a debt, and by the same token it would not be considered exempt from a bankruptcy filing and may be sold or dissolved in order to satisfy some debts.

In addition to the legal status of the trust itself, whether or not part of all of the assets in the trust could be forfeited during bankruptcy also depends on whether the person decides to file under Chapter 7 or Chapter 13. Chapter 7 requires a much broader divestment of assets in order to cover debts compared with Chapter 13, but it also provides for a broader potential discharge of debts once the process is over.

Source: Fox Business, “Is a Trust Untouchable in Bankruptcy?” Justin Harelik, April 9, 2013.

These issues are complex and always depend on the specifics of the case. For more information visit our bankruptcy comparison page.

Posted on behalf of Gingold & Gingold

1718 Peachtree St NW, #385
Atlanta, GA 30309

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Jack L.

They did an excellent job with my case. Jamie took the time to really listen and understand things. She delved into the details and was extremely knowledgeable and non judgmental. Very professional and they know what they are doing. Would definitely recommend!

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Mr. Gingold was recommended by an attorney I had worked with previously. I met with Ira Gingold to discuss credit issues. He went over each specific issue thoroughly. He advised me of the potential outcomes. He did all this in one meeting for a very reasonable price. When we finished I was confident in moving forward with a resolution. He definitely wants to help people take the appropriate course of action for their circumstance.

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I thought the process of filing bankruptcy was going to be a difficult one. However, Gingold & Gingold treated me with respect and dignity from the moment I walked through their door. I had the pleasure of working with Jamie. She is very responsive, professional, and knowledgeable. She took the time and listened to my every concern and handled each and every one of them to my satisfaction. My experience with filing bankruptcy under Gingold & Gingold's representation exceeded my expectations in a major way. They gave me such a peace of mind. I am very pleased with my decision of going with Gingold & Gingold to represent me when I filed Chapter 13 bankruptcy.

Julie T.

Wow! I am finally out of debt and can say that I am debt free after completing my chapter 7 bankruptcy case with Gingold and Gingold. Mr dangled was very knowledgeable and direct with regard to my debt situation. there were no surprises and the case went as I was advised. The staff was also very helpful whenever I had a question. I will definitely recommend them in the future to my friends.

Sherard W.

I cannot say enough about this law firm. From the initial consultation to our discharge, the entire office kept me updated with every step of the entire process. I came to the Gingold after a bad experience with another law firm. Ira and Jamie immediately began treating me like family through this experience. In the end, they assisted with eliminating many debts including my 2nd mortgage. I cannot say enough about the experience and knowledge that Ira brought to the table from the office visits to the court time. Thank you very much for helping me through this tough time. Thank you.

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