If I get a cash gift after I file for Chapter 7 but before the case is closed, can the bankruptcy trustee take it?
A Chapter 7 trustee cannot take a cash gift that you receive after you file for bankruptcy unless you became entitled to receive it before you filed. If it is truly a gift, there is no "entitlement" so it's yours to keep.
(To learn how Chapter 7 works, see our Chapter 7 Bankruptcy area.)
The general rule is that anything you earn or acquire after you file for Chapter 7 bankruptcy belongs to you and does not become property of the bankruptcy estate.
However, this does not include things that you acquired the right to receive before you filed for bankruptcy (even if the receiving would take place in the future). Some examples of things that you may not be able to keep even if you did not receive them before you filed for bankruptcy (unless they are claimed exempt) include:
There are also some exceptions to the general rule. Under the bankruptcy law, there are certain things that the Chapter 7 trustee can take even if you acquire them or become entitled to acquire them within 180 days after the bankruptcy is filed. These include:
This may not apply if there are exemptions available to you for these assets and you amend your schedules to claim the item as exempt. (To learn more, see our Bankruptcy Exemptions area.)
by: Patricia Dzikowski, Attorney