02 Feb If I Have An Estate, Why Am I Filing For Bankruptcy?
What is a bankruptcy estate?
A bankruptcy estate consists of all interest that a debtor has in property of any kind. The bankruptcy estate comes into existence with the filing of a Chapter 7 or Chapter 13 bankruptcy. The estate is administered by the bankruptcy court through a trustee.
Most people realize that real estate, furnishings and vehicles are items that would be included, butmanypeople are surprised to learn that intangible items such as lawsuits or other causes of action possessed by the debtor, as well as bequests or inheritance of property by the debtor within 180 days of filing for bankruptcy are also parts of the estate.
The good news for consumer debtors is that most ofthe property of their bankruptcy estate is exempt from administration, which means they are able to keep it. Also, even when the property cannot be exempted it may be of little monetary value to the trustee and will be abandoned back to the debtor. This type of property is often referred to as being “unworthy of administration.”
The debtor must listeverything that he owns on his schedules. A debtor who fails to list all of hisproperty runs the following risks:
1) Having his discharge either denied or revoked;
2) Having what would have otherwise been exempt items be declared to be non-exempt;
3) Subjecting the unlisted property to claims by unsecured creditors or the trustee;
4) In extreme circumstances, fines and jail time.
The assets that are exempt in a bankruptcy estate will vary from State to State.
Some States use their own exemptions, some States use Federal exemptions, and some States allow the debtor to choose between the State and Federal exemptions.
C hoosingthe wrong exemptions or missing exemptions can have a serious effect on your bankruptcy.
Contact an experienced bankruptcy attorney to explore your options.
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