Jackpot amounts in recent months have caught the attention of millions hoping to get a piece of the prize if they don’t win it entirely. With jackpot amounts reaching historical heights many dream about what they would do with such a windfall. Lottery wins have been known to change lives dramatically. With that being said, what happens if you win the lottery after filing bankruptcy?
The bankruptcy process looks at a lottery win as a windfall; a personal gain or good fortune received unexpectedly. The winnings become a part of the bankruptcy estate. It’s viewed as receiving something similar to a valuable gift such as an inheritance or other payouts such as compensation or insurance. Many assume you will lose your winnings if your bankruptcy case isn’t completed but this may not be true.
Upon learning of your windfall you should report it to your trustee or attorney. Even though the lottery windfall may have been obtained unexpectedly, chances are you had an interest in it before your case was filed. The amount of your proceeds will be compared against outstanding debt obligations related to your case. Your situation will be assessed and options will be reviewed. If you happen to win millions but owe thousands, paying what you owe wouldn’t make a big dent in your proceeds. If this is the case arrangements can be made to pay off creditors.