Legal Question in Bankruptcy in Texas

Your regular income is exempt. That means that money you EARN is not going to be part of your Chapter 7.

But don't confuse "income" with "inheritance." An inheritance is part of the "windfall rule." A "windfall" may not be exempt. There is a specific definition of a "windfall" but the easiest way to understand it is that it's money you receive for not actually doing any work. Lottery winnings would be another example of a "windfall."

So to sum up, a windfall may not be exempt but your regular income will be.

How bankruptcy works: http://www.214bankruptcy.com/how-bankruptcy-works/

Normally, the line is drawn on the date the petition is filed.

If you own non-exempt property on the date the case is filed, you must list it of the schedules. It might need to be turned over to the Trustee. If you acquire the non-exempt property after the case is filed, it is normally untouchable, and you will not be obligated to turn it over to the bankruptcy trustee regardless of the amount of its value.

There are two important exceptions. The first, relevant to your case, are inheritances obtained within 6 months of the date the case was filed. Any inheritance traceable to a death that occurred within 6 months of the date the case was filed is property of the bankruptcy estate and is potentially seizable by the bankruptcy trustee. You must inform the Trustee of your entitlement to the inheritance. If he wants to administer the property for the benefit of creditors, you will be obligated to turn it over to him.

William D. Weber

Weber Law Firm

6666 Harwin Drive, Suite 220

Houston, TX 77036-2251

--------------------

(713) 789-3300 � Telephone

(713) 893-6004 � Fax

(832) 723-7970 � Mobile

[email protected] � E-Mail

WeberLaw.com � Internet