When you file a Chapter 7 bankruptcy, all of your assets become “property of the estate.” That means that control over those things passes to the trustee assigned to your bankruptcy. Basically, the purpose of this rule is to allow the trustee to administer the property and sell anything worth more than your exemptions to raise funds for the unsecured creditors.
In most cases, there will be little if any property that actually gets administered by the trustee. Most debtors filing bankruptcy don’t have a great deal of assets above available exemptions. But, any money you receive from those assets, such as rental income, also becomes property of the estate and may need to be turned over to the trustee.
Be sure to tell your attorney about any contracts or leases you have so they can be properly listed and exempted (if possible).
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