31 Oct What Does “Property Of The Estate” Mean?
Property of the bankruptcy estate is defined by 11 USC section 541. It specifically excludes certain assets of a debtor. Other assets may be property of the estate at first, but later be excluded because they are abandoned by the trustee, redeemed by the debtor, sold, or claimed as “exempt” by the debtor.
It makes a difference if property is considered to be property of the estate or not. If it is property of the estate, the Bankruptcy Court has jurisdiction to administer it. If not, they don’t. The “Automatic Stay”, which comes from section 362, only applies to property of the estate. The automatic stay prohibits creditors from taking any action against property of the estate, and can be a very important protection.
Money considered to be a “trust fund”, such as taxes collected for the IRS or state sales tax, is not considered to be property of the estate. As a result, payments by a debtor to the taxing authority before filing for bankruptcy are not recoverable by the trustee as a preference.
It is a violation of the automatic stay for a creditor to go after, or try to go after property of the estate. A “willful violation” of the stay is punishable by actual damages and possible punitive damages pursuant to section 362(k).
If you have filed a bankruptcy case, be sure to let your bankruptcy attorney know if any creditor threatens to go after your property after you have filed.
Latest posts by Peter Orville, Binghamton Bankruptcy Lawyer (see all)
- Chapter 13 Bankruptcy Court â€“ What Goes On? - January 26, 2014
- Should I File a Chapter 12 Farm Bankruptcy? - September 26, 2013
- Trouble Getting a Mortgage Modification? Get Your Bankruptcy Court to Help! - April 26, 2013
- Filing Bankruptcy? Beware of the Unexpected. - March 27, 2013
- In Bankruptcy it Matters if Your House is Not Your Residence When You File - January 30, 2013