What does Bankruptcy Estate mean?
The bankruptcy estate includes all legal or equitable interests in property or assets of the debtor at the time of the filing. All property in which the debtor has a legal interest is included whether owned or held by another person.
After a debtor has filed the petition for a liquidation bankruptcy, the bankruptcy court representative will review the asset list to determine which assets of the estate are exempt from the liquidation process. These assets will then be determined as property of the debtor. Certain assets in a liquidation bankruptcy estate can be bought back by the filing debtor if the debtor has the ability to do so.
In reorganization bankruptcies, qualifying assets remain part of the bankruptcy estate while the debtor makes payments using a repayment plan to repay specific secured and unsecured debts over a certain period of time.
State and federal bankruptcy laws allow certain assets to be considered exempt from the bankruptcy process. Laws vary by state. Talk to your bankruptcy lawyer about your state's bankruptcy exemptions and whether your assets may be excluded from liquidation in a Chapter 7 bankruptcy.