If you are considering erasing your debts by filing for bankruptcy, it is important for you to understand the bankruptcy process and how you will be affected by the filing. Bankruptcy is a complex area of law, and often there are terms specific to bankruptcy law that require explanation.
What the Term “Bankruptcy Estate” Means For You
When a bankruptcy case is filed it creates what is known as a “bankruptcy estate,” which is the debtor’s interest in his or her property at the time of filing for bankruptcy. The Bankruptcy Trustee assigned to administer the case is in control of the estate. On its face this is frightening, but as long as all assets are listed and exempt in the bankruptcy petition, there is no risk of assets being seized and sold.
First, understand that most people who file for bankruptcy get to keep all or most of their belongings, assets, and property – everything that makes up their bankruptcy estate.
Second, as long as you disclose all of your assets prior to filing and properly value them, you will know if you have assets that cannot be protected through bankruptcy.
The Bankruptcy Trustee has the power to seize and sell assets, then use the proceeds to pay a pro-rata share to certain of your creditors. However, the vast majority of Chapter 7 bankruptcy cases are “no-asset” cases. This means the debtor (the person who files for bankruptcy) does not have assets that can legally be seized, so the debtor loses nothing through the bankruptcy process.
To learn more about keeping your belongings through bankruptcy, read our article What Property & Belongings Are Protected in Bankruptcy?
Deciding Bankruptcy Is the Right Choice for You
Here at the Law Office of Barbara B. Braziel we will make sure you understand the benefits of bankruptcy and how filing with affect you and your family. We file hundreds of Chapter 7 and 13 bankruptcy cases every year. But our clients are never just a number. You will not be left in the hands of a paralegal. You will have access to your attorney throughout your bankruptcy case.
We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.