Our Spokane bankruptcy law office can help you through the entire bankruptcy process. We can help you determine if you qualify for relief, under which specific chapter, and if you should seek relief under "several chapters" at the same time.
It is equally important to know if you should abstain from filing for at least several months. We can help you with the follownig bankruptcies:
- Chapter 7: Liquidation (liquidates all assets and debts)
- Chapter 9: Bankruptcy of Municipality
- Chapter 11: Reorganization or Liquidation for Business
- Chapter 12: Family Farmers Bankruptcy
- Chapter 13: Wage Earner Plan (individual debt reorganization plan)
- Chapter 15: Cross Border Bankruptcy (Canadaian assets)
Creation of the estate: Our Spokane bankruptcy law office reminds you that this information is general and does not constitute legal advice. It is important that you understand the significance of the "estate" that you create if you decide to file.
The creation of an estate occurs at the moment of a debtor files; all of the debtor’s property becomes property of the estate – see § 541(a). When filing, the debtor must list ALL property, even if the value is $0.
Everything that the debtor has a legal or equitable interest in becomes property of the estate – including the dividends of stock acquired before the filing but accrued after filing because the debtor had a legal/equitable interest in the stock.
Equitable interest – rights under custom; An interest held by virtue of an equitable title or claimed on equitable grounds, such as the interest held by a trust beneficiary.
Legal interest – rights under the law; an interest that has its origin in the principles, standards, and rules developed by courts of law as opposed to courts of chancery; an interest recognized by law, such as legal title.
1. State law determines whether the debtor has a legal or equitable interest in the property.
2. If an exemption is equal to or exceeds the amount of the equity, then there is no value to the estate – once the property becomes valueless, it’s abandoned under § 554(a); Also, property that is “burdensome to the estate or of inconsequential value" may be abandoned under § 554(a).
3. Section 541(b) lists property that is not property of the estate – this list includes, but is not limited to: “any power that the debtor may exercise solely for the benefit of any entity other than the debtor”; funds placed in educational accounts or used for tuition credits for the debtor’s children or grandchildren; funds withheld for ERISA or Social Security; etc.
Please contact our Spokane bankruptcy law office before making any determination regarding transfer of rights.
1. § 541(c)(2) – non-bankruptcy law means any state or federal law.
2. If the debtor has a trust that is ERISA-qualified, then that restriction on transferability is enforceable; it is recognized in bankruptcy.
3. If there are restrictions on transfer rights that spring forth from the filing of bankruptcy, these restrictions are not enforceable – i.e. on leases.
4. Trusts, as long as they contain a spendthrift provision, are not property of the estate – § 551(c)(2).
5. § 541(c) invalidates any provision of non-bankruptcy law, as well as any condition created by contract or transfer instrument, that restricts the transfer of property rights so that they do not pass to the estate on bankruptcy.
6. Tax refund proceeds are property of the estate. Contact our Spokane bankruptcy law office for more information regarding taxes
7. Expectancies, Lotteries, etc. are property of the state.
8. Inheritances are property of the estate if entitled to such w/in 180 days of filing bankruptcy. § 541(a)(5).
9. If there’s an inadvertent/innocent omission from the schedules, the debtor can amend his schedule at any time according to the rules.
10. Turnover: the duty to deliver property to the estate under § 542; applies even if the estate’s equity in property is small.
11. § 521(a)(4) obliges the debtor to surrender all property to the trustee when the petition is filed.
12. Under § 542, any property of the debtor in the possession of other persons must be delivered to the trustee or its value accounted for; likewise, a debt due to the debtor must be paid to the trustee.
13. The debtor is usually able to keep and use estate property pending confirmation of the plan. Upon confirmation, all property in the estate that is not otherwise disposed of under the plan revests in the debtor. If the plan is ultimately consummated, the debtor keeps this property which forms part of the debtor’s new estate.