What happens if I inherit money while in Chapter 13?
Andrew Ramirez
Published Mar 20, 2026
In most bankruptcy courts, if you receive an inheritance during your Chapter 13 plan period, you’ll have to pay it into your plan. If you receive an inheritance while you are in the midst of a Chapter 13 bankruptcy repayment plan, most courts will require that you pay this amount into your Chapter 13 plan.
Can I keep cash in Chapter 13?
Generally speaking, the funds you have in your bank accounts are safe when you file for Chapter 13 bankruptcy. Chapter 13 also allows debtors to keep bank account funds in excess of the allowable exemption amount provided the excess amounts are worked into the Chapter 13 plan and paid back over the life of the plan.
Do you have to pay cash gifts in Chapter 13?
But the trustee might be able to argue that the cash gift gives you additional disposable income that should go to your unsecured creditors. So you might have to pay all or a portion of it to your creditors in your Chapter 13 plan if you want the court to approve your case. Cash gifts received after plan confirmation.
Can you pay back a loan under Chapter 13?
If you file under Chapter 13, the situation is a little more complicated. If the loan from friends or family is documented by a promissory note, you’ll be able to pay it back through your payment plan. However, those payments will be proportional to the size of the debt.
When to pay an inheritance in Chapter 13?
Even if you receive your inheritance more than 180 days after filing your Chapter 13 case, the bankruptcy trustee might argue that you should pay the inheritance amount into your Chapter 13 plan. Not all courts have ruled on this issue.
How can I pay my friends and family during bankruptcy?
If you want your friends and family to receive payment through the bankruptcy process, you need to have an official document recording the loan amount, the parties to the loan, and the repayment terms. Otherwise the court will leave them out of the bankruptcy process altogether and everything you pay will go to your official creditors.
