November 9th, 2009 by Questions

I may be facing bankruptcy over a $35,000 credit card debt and I would have a surplus income payment of about $600 a month.

If, at some point, during the 21 months I receive an inheritance from the will of my sole (elderly) parent, estimated at around $80,000, will I have to surrender $40,000 of that to the trustee? This will be more than the debt I owe. Are inheritances from parents in any way protected?

Posted from: Ontario


One Response to “bankruptcy”

, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:

If you are in the midst of a bankruptcy and receive or become subject to an inheritance you will loose the full balance of the inheritance. Legally speaking, an inheritance is seen as an non-exmpt asset, not income. Non-exempt assets vest in the trustee, where income is subject to the surplus income provisions.

Now depending on how much your debt is a portion of the inheritance may be returned, but this is only if there is sufficent to pay the administration costs in full, all your creditors in full and 5% interest.

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