What is a bankruptcy “estate” & “property of the estate”?

This entry will explain the concepts of the bankruptcy “estate” and “property of the estate” and the importance thereof. Upon a debtor’s filing of a bankruptcy case, the bankruptcy “estate” is immediately formed. It is constituted of all of the debtor’s property, both tangible and intangible, as of the filing of the petition.

What is considered a property in a bankruptcy case?

The definition is very broad and includes almost every imaginable kind of property that you own at the time your bankruptcy case is filed, with a few exceptions. The estate includes: All of your interests in tangible property (such as personal property, real estate, vehicles, financial accounts, etc.);

What happens if a bankruptcy case is not a property of the estate?

This distinction can be hard to draw at times, and litigation can arise over whether certain money or property was, in fact, held for the benefit of another and, thus, not property of the estate. All actions by creditors against the debtor and property of the estate are stayed by the automatic stay at the outset of the bankruptcy case.