Once you have made the decision to file for bankruptcy you are likely to start hearing terms and phrases that you are not familiar with and that may be a bit confusing, but that are incredibly important to the administration of your case. Understanding these terms is key to being an active participant in your bankruptcy case rather than just sitting by and hoping that it goes well. By discussing these terms with a bankruptcy lawyer, clients will likely find themselves feeling more informed and confident regarding their decision to file for bankruptcy.
One term that you are likely to hear used relatively frequently during the process of your case is the phrase “bankruptcy estate”. Simply put, this term refers to all of the legal or equitable interests that are held in the form of property at the time that you filed your bankruptcy petition.
It is vital to realize that the wording is not “property that you own”, but rather, “property in which you hold interest”. This means that it is not necessary for you to own the property or even possess it in order for it to be included in the inventory of your bankruptcy estate.
Your bankruptcy attorney will also advise you that your bankruptcy estate will be used to make determinations regarding the type of bankruptcy, or Chapter, that would be appropriate for your specific situation. This means that the “bankruptcy estate” can impact whether you will be required to liquidate any assets (property that will be sold by the Trustee) or if your property is exempt from liquidation.
It is essential that you discuss your situation with an experience bankruptcy attorney as soon as you start thinking that it may be a good idea for you to file for bankruptcy protection. This way your attorney can help guide you through the entire process and ensure that everything is going well from beginning to final discharge. The earlier you start talking about your case, the earlier your finances can be straightened out.
Photo by Flickr Creative Commons David Wall