One of the fundamental concepts in bankruptcy law is the bankruptcy estate. When a person files for bankruptcy, the “bankruptcy estate” is created. All of the debtor’s assets and interests in property are property of this estate.
So, what is included in the bankruptcy estate? Section 541 of the Bankruptcy Code defines what property is incorporated into the bankruptcy estate. In short, most all of a debtor’s property will be included in the estate, including interests in real and personal property, interests in lawsuits, and some property fraudulently transferred before filing. There are several specific things that the Bankruptcy Code excludes as property of the estate. Some things not included as property of the estate are the rights to receive social security payments, most funds placed in an education savings account, and a pension that is covered by ERISA. The assets that are not part of the bankruptcy estate are outside of the bankruptcy court’s control.
Once you file bankruptcy, everything in the bankruptcy estate is managed by the Bankruptcy Trustee assigned to your case. In a Chapter 7, the Trustee is responsible for liquidating the estate and distributing the proceeds to creditors. In a Chapter 13, the Trustee is in charge of approving and administering your payment plan, collecting your payments, and distributing money to your creditors.
The experienced attorneys at Bond & Botes are extremely knowledgeable about the ins and outs of bankruptcy. If you have questions about whether bankruptcy is right for you, please contact one of our offices and set up a free consultation today.