Properties that are Part of the Bankruptcy Estate
Any property that the consumer legally owns whether or not it has been fully paid. All properties that the consumer has the right to sell belong to the estate.
o This includes properties that the consumer is not using but is earning from (leased space or objects.)
o A deposit on a stock (held by the stock broker.)
o Security deposit (advanced payment) held by the landlord or utility company.
o Money investment on a business venture.
(Accounts Receivable and Contingent Future Interest) Income generated by an estate property like wages, royalties, and commissions.
o All projected profit (royalties, sales proceeds, patent, dividends, and earnings from stocks) from work or services rendered when bankruptcy was filed.
*This is especially true if the consumer is a musician, artist, writer, or an inventor (scientist.)
o A tax refund.
o Cash equivalent of vacation or work severance pay.
o Proceeds of an insurance policy.
o Expected income from a profit-sharing plan.
Community Property. If the consumer lives in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin (also Alaska, if the consumer signed a community agreement or trust) and has filed bankruptcy with his/her spouse, then all properties (both conjugal and separate) incurred inside the marriage is part of the estate.
What if only one spouse filed bankruptcy?
Only the community property and the separate property of the filing spouse belong to the bankruptcy estate.
*Also, if one of the spouse’s received a gift and/or inheritance inside of the marriage, those would be considered exempted from the estate.
Common Law Property. If the consumer is filing bankruptcy with his/her spouse then all properties that they own as a couple or separately belong to the estate. If a consumer is filing individually the bankruptcy estate includes:
• His/her separate property or those that have his/her name (signed) on the certificate.
• Gifts and/or inheritance that he/she received.
• One half of the joint property (unless just one of the spouse owns or has an legal right to the property.)
Read these resources for more information: