WHAT IS THE “BANKRUPTCY ESTATE?

When filing for bankruptcy, all of your property (including your bank accounts and the funds contained within) becomes part of a “bankruptcy estate” which is administered by a court-appointed bankruptcy trustee for the duration of your case. It is absolutely vital to understand what property of yours is included in the bankruptcy estate before filing and the limitations for what you can do with these assets while your case is active.

After filing for bankruptcy, a “bankruptcy estate” is formed and the estate becomes the temporary owner of your  property. While your case remains open, it is vital that you do not sell or transfer any property included in the  bankruptcy estate. Otherwise, the proceeds from the sale of your property can be given to the bankruptcy trustee so that they may use them pay your creditors, even if your property was exempted when you filed. While there are exemptions available to protect your assets from liquidation, if those assets are sold or transferred while your case is pending then it could result in your being unable to keep these funds. If you are considering transferring or selling any property while in an active bankruptcy, please contact your bankruptcy attorney first so or otherwise it could adversely affect your case, at large.

If you would like to learn more about how a bankruptcy court would handle your
property if you were to file, please feel free to reach out to your Yuba City bankruptcy attorney at (530) 797-4402.