What Assets Are Property of the Bankruptcy Estate?
New York bankruptcy attorney explains how the process treats assets
The term “bankruptcy estate” refers to all assets that become vested in the trustee appointed by the court after a bankruptcy petition is filed. It is a fluid term, since those assets may be owned by the debtor, owed to the debtor or held by others whose rights in the property are subject to challenge. What is included in the bankruptcy estate has a great bearing on the outcome of the case. At Mark E. Cohen, Esq., I have more than 28 years of bankruptcy law practice which is used so you can get the full benefit of the law’s protections.
What is included in a bankruptcy estate?
Your bankruptcy estate is basically all the property you hold title to, whether or not it’s in your immediate possession. But the estate also includes property you recently transferred. The bankruptcy trustee scrutinizes recent transfers to see if you made them to frustrate your creditors. In such cases, the trustee can act to have the property returned to the estate. A bankruptcy estate also includes property you are due but haven’t yet received. Certain categories of assets you acquire within 180 days of your filing, such as an inheritance, are also part of the estate. If you are married and filing only for yourself, your bankruptcy estate includes your share of all marital property.
When considering consumer bankruptcy, you have two main choices: Chapter 7, also known as liquidation, and Chapter 13, which is a restructuring of debt. The bankruptcy estate comes into play in Chapter 7, because the trustee must take charge of your assets and sell some of them to partially repay your creditors before your remaining eligible debt is discharged. Chapter 13 does not require a liquidation, or selling off, so the estate is not as relevant to the process.
If you are wondering “What type of bankruptcy should I file for?,” you need to consider the property in your estate and what assets you don’t want to part with it. Debtors who want to retain the lion’s share of their estate should file Chapter 13. However, even with Chapter 7, you can retain an ample amount of property, especially if all of your assets are exempt and are therefore excluded.
Property excluded from bankruptcy in New York
When you file for bankruptcy, you can exempt certain categories of property, up to certain amounts, from the estate. Couples who file jointly may exempt more property than individual filers. You also get the choice of claiming state or federal exemptions. Which choice is better depends on the type of property you own and which assets you’d like to retain. New York bankruptcy property exemptions include:
- Homestead — In Queens and other metro New York counties, you can exempt a home valued up to $170,825, whereas the exemption is $142,350 in counties like Orange and only $85,400 in other New York counties.
- Motor vehicle — You can exempt one vehicle up to $4,550 in value or up to $11,375 in value if the vehicle has been modified to accommodate your disability.
- Wildcard — If you don’t use the homestead exemption, you may protect any personal property or cash up to a value of $1,150.
There are numerous other exemptions covering home furnishings, tools of your trade, wages, pensions, retirement plans and other assets deemed essential.
Determining what belongs in your bankruptcy estate and what may be lawfully excluded can be a complex and challenging task. If you want the maximum benefit from your bankruptcy filing, you must choose an experienced attorney who is committed to careful and accurate analysis of your financial assets and debt situation.
Contact a skilled bankruptcy lawyer in Queens, NY
Mark E. Cohen, Esq. provides personalized bankruptcy advice for consumers in Queens and throughout New York City and its surrounding counties. To schedule a consultation, call 718-487-9979 or contact me online. My office is conveniently located on Old Country Road in Westbury.