What Assets Are Property of the Bankruptcy Estate?

Find out what property is part of your bankruptcy estate in Chapter 7 and Chapter 13 bankruptcy.

Related Ads

When you file for bankruptcy, almost all property you own (or are entitled to receive) becomes property of the bankruptcy estate. If an asset is property of the bankruptcy estate, the bankruptcy court has the right to administer it in your case. Read on to learn more about what property is considered part of your bankruptcy estate.

For more information on how your property is treated in bankruptcy, see our topic areas on Your Property in Chapter 7 Bankruptcy and Your Property in Chapter 13 Bankruptcy.

Property of the Bankruptcy Estate in Chapter 7 Bankruptcy

In general, your bankruptcy estate includes almost all property you have an interest in at the time you file for Chapter 7 bankruptcy. But for the most part, property you acquire or become entitled to after your filing date is not property of the estate in Chapter 7 bankruptcy. The following are the most common types of property included in your bankruptcy estate.

Property You Own Whether or Not It Is in Your Possession

With a few exceptions (such as Social Security payments and ERISA-qualified retirement accounts), most property you own is considered part of your bankruptcy estate whether or not you are in possession of the asset. This means that even if you don’t currently have the property (for example, a car you loaned to a friend or a security deposit you gave to your landlord), it is still property of your bankruptcy estate and must be disclosed in your bankruptcy paperwork.

Property You Are Entitled to Receive

If you have a right to receive an asset, that property is part of your bankruptcy estate even if you haven’t received it yet. Common examples include accounts receivable, tax refunds owed to you, and unpaid income or commissions earned prior to filing your case.

Rights to Certain Assets Acquired Within 180 Days of Your Filing Date

In general, property you acquire after filing for Chapter 7 is not property of the estate. But there are exceptions. If you become entitled to receive any property within 180 days after your filing date because of an inheritance, marital settlement agreement, divorce decree, life insurance policy, or death benefit plan, it is considered part of your bankruptcy estate.

Revenues and Profits Generated by Property of the Estate

If the property in your bankruptcy estate produces profits or additional revenues (such as investment property rental income), those revenues are property of the bankruptcy estate as well.

Fraudulent Transfers the Trustee Recovers

Under certain circumstances, if you give away or transfer your property prior to filing for bankruptcy, the bankruptcy trustee may be able to avoid (cancel) the transfer and get the property back for the benefit of your creditors. As a result, any fraudulently transferred assets are considered property of the bankruptcy estate.

For more information on what transfers may be considered fraudulent, see Bankruptcy Clawbacks: Preferential & Fraudulent Transfers.

Preferential Payments Made to Creditors

You must treat all of your creditors fairly in bankruptcy. This means that you can’t choose to pay one creditor over another. If you make payments to a creditor shortly before filing your case, the trustee may be able to get that money back and bring it into your bankruptcy estate to be distributed among all of your creditors.

To learn more, see What Is a Preferential Debt Payment in Bankruptcy?

Community Property

If you live in a community property state, all community property is part of your bankruptcy estate whether you are filing a joint bankruptcy with your spouse or filing alone. But if you are filing without your spouse, his or her separate property is not part of your bankruptcy estate.

Joint Property in Common Law Property States

In a common law property state, if you are filing a joint bankruptcy with your spouse, both you and your spouse’s separate and joint property is property of the bankruptcy estate. If you are filing alone, only your separate property and your portion (typically half) of any joint property is part of your bankruptcy estate.

To learn more, see What Happens to Joint Property in Bankruptcy?

Appreciation in Value of Property of the Estate

If an asset is property of the bankruptcy estate and it increases in value after your case is filed, that appreciation is also property of the bankruptcy estate.

Property of the Bankruptcy Estate in Chapter 13 Bankruptcy

A Chapter 13 bankruptcy estate includes all property of the estate described above. But unlike in Chapter 7 bankruptcy, income you earn and assets you acquire after your filing date (but before your Chapter 13 is dismissed, closed, or converted) are also considered property of the bankruptcy estate.

Talk to a Lawyer

Start here to find lawyers near you.
HOW IT WORKS
how it works 1
Briefly tell us about your case
how it works 2
Provide your contact information
how it works 1
Choose attorneys to contact you
NOLO-web3:DRU1.6.12.2.20161011.41205