Bankruptcy does more than just change your bank account. For a lot of people in Southern Mississippi, it’s a stressful reset button. However, it’s also a chance to start over without the stress of old debts. When the court closes your case, the bills stop coming after you, and you can finally think about the big picture again. That’s when you should take a closer look at your estate plan.
The plan you made before bankruptcy was built for a different life. Maybe you had more property then, or different accounts, or a life insurance policy you’ve since changed. Some assets might have been sold to pay creditors, while others, like a Mississippi homestead up to a certain value, were protected. If your will or trust still lists property you no longer own, or leaves money to people you no longer intend to benefit, you’re leaving behind a legal mess for your family.
There’s no rush to rewrite everything the day after discharge. First, make sure your footing is solid. That means:
Jumping into new loans too soon can undo months of hard work. Think of this as rebuilding the foundation before adding new rooms to the house.
Once your finances feel steady, your estate plan can reflect that. You could start over with your will or make a trust to keep your property out of probate. You could change your life insurance to make sure your dependents are covered, or you could check your retirement accounts to make sure the right people are named.
We’ve helped people across Southern Mississippi protect what they’ve rebuilt after bankruptcy. At O’Brien Law Firm, LLC, we understand you don’t want to go through financial loss again, and a strong estate plan is part of that protection. Call us at 662-672-7619 or use our online intake form to get started.
Filing for bankruptcy is meant to give you a fresh financial start, but what happens if you’re in the middle of your case and a relative passes away, leaving you money or property? In Mississippi and southwest Tennessee, the law is clear: timing matters, and so does how your case is structured.
When you file for bankruptcy, your assets become part of the bankruptcy estate. Under federal law, if you become entitled to an inheritance within 180 days of filing, it’s usually pulled into that estate. What matters is the date of the person’s death, not the day the inheritance ends up in your hands.
In Chapter 7, non-exempt inherited assets can be sold to pay creditors. In Chapter 13, the value of a non-exempt inheritance can raise your monthly payments.
Mississippi has opted out of federal bankruptcy exemptions, meaning you can only use exemptions under state law. For example, Mississippi’s retirement account exemption protects funds in certain qualified plans if you are the participant or named beneficiary.
If the retirement funds came from someone else’s account and you’re not a beneficiary, you likely can’t claim that protection.
Inheritance information is hard to hide. Probate records are public, and trustees often hear from executors, relatives, or even the court. Failing to disclose an inheritance can have severe consequences. You could lose your bankruptcy discharge, be ordered to repay the amount (even if it’s spent), or face allegations of bankruptcy fraud. The cost of trying to hide it is almost always higher than being upfront.
At O’Brien Law Firm, LLC, we understand how frustrating it is to think you might lose an inheritance during bankruptcy. We help clients in Southern Mississippi figure out what’s protected, what’s not, and how to minimize the impact on your case.
If you’ve received or expect to receive an inheritance mid-case, don’t guess your next step. Get legal guidance before you act. Call us at 662-672-7619 or complete our online intake form to discuss your situation and learn your options. The sooner we talk, the more we can do to protect your financial future.
