Throughout this blog, and most other Bankruptcy blogs and sites, we use the term “Bankruptcy Estate” (or just “Estate”), but what exactly is this “Estate?” In basic term, the Estate is created when a Bankruptcy petition is filed, and it includes all the property of the debtor that an be “administered” by the Trustee as of the date the case is filed. This includes real estate (such as your home or rental property), vehicles, cash and bank accounts, boats, furniture and household goods, and interests you may own in businesses. The Estate also includes any rights to sue someone else, such as a personal injury claim or employment discrimination claim, and any property that was fraudulently transferred prior to the filing of the case. It might include some or all of your tax refund, even if you have not received it. Although there are occasionally disputes about what is included in the Estate, in reality those cases are somewhat rare. The Bankruptcy Estate may be compared to the estate created when someone passes away, and the executor or administrator takes over the decedent’s property. While the Estate is created when the case is filed, and generally only includes property owned by the debtor on that date, there are exceptions. Inheritances received within 180 days after the case is filed are Estate property (even if the Chapter 7 case has been discharged and closed), and the same is true for marital property settlements, death benefits or some life insurance proceeds. In individual Chapter 13 and Chapter 11 cases, wages earned after the case is filed are property of the Estate.
If you are thinking about a Bankruptcy case and this post makes you think that you may lose everything, there is one very important thing for you to remember – very few people whole file for Bankruptcy lose any property at all to the Bankruptcy Trustee. Most people have exemptions to cover most or all of their valuable property. Even if exemptions do not cover everything, the remaining property is usually not valuable enough for the Trustee to sell.
One of the main subjects covered in the initial consultation is property you own that will become part of the Estate. If there is a risk that the Trustee will sell any of your property it is important to discuss it before you file. A good Bankruptcy lawyer will ask questions you may have not considered, such whether you have a right to sue anyone or whether a parent is in ill health. Two of the most commonly overlooked items when people file without good counsel are tax refunds and personal injury claims. If you are facing a Bankruptcy case, or just want to get more information, contact us for a meeting with a Georgia Bankruptcy lawyer or metro Atlanta Bankruptcy lawyer. In just a few minutes, a good lawyer will know what is, or is not, property of the Estate.