What Happens If I Win The Lottery While Bankrupt?
Any property of a bankrupt that was acquired after the date of his bankruptcy but before the date of his discharge is referred to as “after-acquired property” and forms part of the bankruptcy estate.
Typical examples would include lottery winnings, inheritances or any gifts of significant value. These items may be seized and sold by the Trustee for the benefit of your unsecured creditors.
A work bonus, profit sharing cheque or back pay for income benefits would not be considered after-acquired property. However, they will be counted as income and are dealt with through the surplus income calculation and may affect the length of time you remain in bankruptcy.
If you have yet to file for bankruptcy and are anticipating a potential windfall, you might want to consider filing a consumer proposal as after-acquired property and surplus income are not dealt with in a proposal. You could then use the proceeds from the windfall to fund your proposal.
Each individual situation is unique so you should meet with a Licensed Insolvency Trustee to review your options before making any decisions.
Powell Associates Ltd. is a Licensed Insolvency Trustee (LIT) focused on providing debt settlement, proposal and bankruptcy solutions for individuals and businesses. We offer free consultations to review your personal financial situation and practical debt resolution options. Contact us to discuss your situation over the phone or book an appointment to meet us face-to-face in Saint John, Moncton, Fredericton, Charlottetown or Dartmouth - it's your choice.