Windfalls

What if I get an inheritance, win a lottery, or get any other “windfall” while I am bankrupt?

The short answer: you lose it.

According to section 67 of the Bankruptcy and Insolvency Act, all assets “vest” in the trustee, meaning the trustee is required to take your assets. The only exceptions would be assets that are otherwise exempt from seizure (like most of your personal belongings, which the trustee can’t take).

This rule covers all assets that you own on the date you file bankruptcy, located anywhere in the world, and if covers all assets that may be acquired or “devolved” on the bankrupt before discharge.

For example, if your rich uncle dies while you are bankrupt and leaves you some money in his will, that money will go to the trustee, to be given to your creditors. It doesn’t matter that it may take a year or two to distribute the money from your uncle’s estate, at which time you are already discharged from bankruptcy; because he died while you were bankrupt, the money goes to the trustee.

Examples of windfalls would include:

• an inheritance
• winnings from a lottery, bingo or casino; or
• any other cash, gift or windfall

Please call our office at 1-800-472-7775 or contact your trustee if you have any questions.