The odds of actually winning the lottery are, unfortunately, pretty slim! The chances, however, are greater that, after seeking bankruptcy protection, you may find yourself the recipient of some type of “windfall”. This can come in the form of an inheritance, a property settlement as a result of a divorce, sale of real estate, receipt of proceeds from a deceased life insurance policy, proceeds from a personal injury claim or any other kind of lawsuit proceeds and, yes, lottery or gambling winnings.
At the time that you file your bankruptcy petition, whether it is a Chapter 7 or Chapter 13, it is imperative that you list any and all of these as potential assets if, at the time you file, you have reason to believe you will receive a “windfall” of any kind. If you are unaware at the time of filing, then it is very important to let your bankruptcy attorney know immediately if it becomes apparent to you that you will be receiving funds in addition to your normal monthly income.
If you have a “windfall” anytime during the life of your Chapter 13 payment plan, the proceeds will go toward paying your creditors through the chapter 13 plan. This can sometimes pay your case out early and you will receive an early discharge from your bankruptcy so that you can begin rebuilding your credit. If you have filed a chapter 7, it is very important that you notify your bankruptcy attorney if you receive any of these type proceeds within one hundred and eighty days after filing your chapter 7 bankruptcy to discuss whether or not these proceeds are applicable to your case.
If you are currently suffering financial stress and need any assistance with your creditors, please contact us at the office nearest you to schedule a free consultation with an attorney who can review your situation and recommend the best options for you.
Amy K Tanner is a shareholder in several of the Bond & Botes Law Offices. She holds a Bachelor of Science from Auburn University at Montgomery, and a Juris Doctorate from Thomas Goode Jones School of Law. She focuses primarily on consumer bankruptcy law in the Huntsville and Decatur offices.Read her full bio here.