July 22nd, 2011 by Questions
If a bankruptee receives an inheritance which is a large sum of money before they are discharged will the inheritance be taken by the trustee to pay the debts.
Posted from: Ontario
July 22, 2011 at 6:52 am, A licensed trustee said:
Any sort of windfall (and an inheritance qualifies as a windfall) MUST be reported to your trustee. In most cases, it will be seized and used to pay off your debts. If your debts are paid in full, you may apply to the Court to have your bankruptcy annulled.
Another option is to file a consumer proposal that offers all (or most) of the inheritance to your creditors – if they accept the offer then the bankruptcy is annulled. We use this strategy when the inheritance may not cover the entire debt, but can pay back a big piece. Of course, the creditors are under no obligation to accept the proposal, but they often do simply because it is the “nice” thing to do. They weren’t expecting the inheritance so your windfall is their windfall and most will take that in to account when they vote on the proposal.
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