Can we avoid giving any of my inheritance over to the trustee if I inherited it after our bankruptcy case was closed? 2 Answers as of May 19, 2011

My wife & I filed Chapter 7 last year & received a discharge. The trustee deemed our case a no asset case. On May 6, our case was closed within the bankruptcy court. Sound simple? It's not quite that cut & dry. My mother passed away within the 180 days of our filing. I received an inheritance. I notified my lawyer via email, who in turn notified the trustee. The trustee deemed the case a no asset case even though there were assets that could be dispersed. Our lawyer noticed the mistake & contacted the trustee to tell him, but it was after the May 6 closing of the case. My question is this: As the case was closed, can we avoid giving any of my inheritance over to the trustee? Or does the trustee have the authority to essentially go in and "change his mind" or correct his mistake?

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Indianapolis Bankruptcy Law Office of Eric C. Lewis
Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
First, it's not necessarily a "mistake" that the Trustee closes a case that has some sort of assets if he or she doesn't believe it is worth pursuing for liquidation or that it would make a meaningful dividend to creditors of the bankruptcy estate. Further, if the inheritance comes within that 180 day period post-closing, the trustee has the statutory authority to reopen the case and demand turnover of the inheritance for the benefit of the bankruptcy estate.
Answer Applies to: Indiana
Replied: 5/19/2011
The Schreiber Law Firm
The Schreiber Law Firm | Jeffrey D. Schreiber
Any inheritance received with 6 months is property of your bankruptcy estate whether or not it was designated as a no asset case at the beginning.
Answer Applies to: California
Replied: 5/18/2011
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