Will I lose my inheritance money?

I filed for chapter 7 bankruptcy earlier this year. I still don’t have a job and I’m living in the basement of my friends house. My grandma has been very sick for months now and is going to pass away soon. I know she has left me about $50,000 in her will. Can I use this money to buy a car or go on vacation or do whatever I want with it without worrying about it?

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  1. The law states that if someone passing away within 180 days of the filing of your bankruptcy case, this asset (inheritance) becomes part of your bankruptcy and your trustee will take the money and distribute amongst your creditors. You may be able to protect or “exempt” part or all of this inheritance depending on the amount and whether you used your “wildcard” exemption on any other asset. It is the “date of death” that is relevant here. For example if you filed bankruptcy on 1/1/2014 and grandma passes on 5/25/2014 then the asset becomes part of your bankruptcy estate or case. You actually have to count the days. If the date of death is 181 days after you filed bankruptcy then the trustee has no claim to these funds. If it’s that close, best to check with your attorney first to verify.

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