The bankruptcy estate is a term that you may hear referenced when you do research about bankruptcy. It could be a bit confusing to understand because the idea of a “bankruptcy estate” is not very intuitive. Why would the bankruptcy have an estate? What property is it referring to? Whose property is it?
Well, the bankruptcy estate actually refers to your property at the time of filing bankruptcy. Your property, at the time of filing, becomes property of the bankruptcy estate. This does not mean that you lose your property or access to it. It just means that all of your property has to be accounted for in the bankruptcy. Luckily, there are exemptions under federal and state law that allow you to protect your property and keep it away from your creditors. However, you still must disclose everything you own so that the Bankruptcy Court can determine whether or not any of that property can be used to satisfy the debts of your creditors. Hence, it becomes part of the bankruptcy estate.
So, what property must be disclosed? Pretty much everything. This includes any real estate that you own, such as your home or even a campground. It would include your cars, motorcycles, and ATVs. It includes personal items such as furniture, clothes, and jewelry. It also includes cash, savings, and investments. The bankruptcy estate even includes intangible things such as the right to a lawsuit, intellectual property, and inheritances. Your bankruptcy attorney will review schedules A and B of the bankruptcy petition with you in order to list everything of relevance.
Once again, luckily, also have exemptions to protect this property. Therefore, in the vast majority of bankruptcy filings, the debtor does not lose any of his or her property. It must be disclosed so that it should be protected.
However, in some cases the value of the property of the bankruptcy estate exceeds the exemptions available to protect it. In these cases you may be required to file a chapter 13 bankruptcy and repay some of your debts to your creditors. In some of these cases you may still file a chapter 7 bankruptcy if you surrender some property to the bankruptcy trustee.
Discussing these situations with your attorney will be very important to determine whether or not bankruptcy is the best option for you. Bankruptcy has many advantages and many protections for debtors in distress. However, you must abide by the court’s rules and regulations in order to enjoy those protections. Determining your bankruptcy estate is one of these requirements.
Call us at 412-461-4837 if you have any questions about bankruptcy, specifically whether or not all of your assets will be protected.