Browse terms
The bankruptcy process
Estate
All the legal or equitable interests a debtor has in property at the time the bankruptcy case is filed, including property held by someone else. 1
Talk to a lawyerHow it works
Starting a case creates the estate. It technically becomes the temporary legal owner of the debtor's property, wherever the property is and whoever holds it. 1
Property comes back out through exemptions, which let an individual keep certain property from unsecured creditors. Exemptions are not automatic: the debtor must file a list of the property claimed as exempt. 1 2
Creditors are generally paid from the nonexempt property of the estate. In a Chapter 7 case that has assets, the trustee's main job is to sell nonexempt assets so that unsecured creditors get the largest possible return. 1 3
The estate can grow after filing. It takes in an inheritance, property from a divorce decree or a property settlement with a spouse, and life insurance or death benefit proceeds that the debtor gets, or becomes entitled to get, within 180 days after filing. 4
Common questions
Who looks after the estate?
A trustee is appointed to represent the bankruptcy estate. 1
What happens to the estate if my case is dismissed?
Unless the court orders otherwise, dismissal returns the property of the estate to whoever held it just before the case began. 5
Does the automatic stay protect estate property?
Yes. The stay stops most collection activity against the debtor and property of the bankruptcy estate. 1
Sources
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