Question: If I receive an inheritance about one week before going bankrupt do I have to disclose this? I used this money to pay off 2 people who I owe money too and kept the rest for living expenses for one month.
Answer: Yes, you should disclose that to your trustee, who can then determine whether or not it’s an issue. In general terms, it is considered a “preference” to repay one creditor but not another; it’s not fair that one creditor is receiving and advantage just prior to your bankruptcy.
However, there are other factors that may be relevant, such as the amounts involved, so you should discuss this with your trustee prior to filing bankruptcy.
Tags: inheritance