The Morrison Law Group strives to achieve complete client satisfaction with the services that we provide over the course of a bankruptcy case, as well as the ongoing services that we provide post-bankruptcy. Not all Utah Bankruptcy attorneys can make this statement, but the Morrison Law Group is not like other Utah bankruptcy law firms.
- 541 of the Bankruptcy Code contains provisions stating that any bankruptcy case filed voluntarily, involuntarily, or jointly creates an “estate.” It is this property that is used to repay a debtor’s unsecured creditors who are, of course, considered interested parties. Chapter 7 trustees have an obligation to liquidate or sell the property of the estate “as expeditiously as is compatible with the best interests of parties in interest.”
A “bankruptcy estate” is created at the moment a bankruptcy case is filed. This “estate” is therefore comprised of a debtor’s legal and equitable interests as of the filing date of the bankruptcy petition. It includes both tangible and intangible real and personal property. § 541 mandates that all property is included in the bankruptcy estate unless exempt or specifically excluded by statute.
This means that one way a debtor may remove assets from his or her bankruptcy estate is to claim an exemption for the property. For assets that are not considered part of the estate, claiming them as exempt is unnecessary since, by definition, they are beyond the reach of the bankruptcy trustee and creditors.
Even the property that the debtor claims as exempt is “property of the estate” until the exemption claims are finalized and confirmed, typically 30 days after the 341 meeting of creditors. It is when an exemption becomes final, or when the asset is abandoned by the trustee, that it is no longer property of the estate.
A debtor’s bankruptcy estate also contains some defined property interests that would have been the property of the bankruptcy estate had the debtor held an interest in the property on the date that the petition was filed, and which the debtor acquires or becomes entitled to acquire within 180 days after the filing of the bankruptcy case.
These interests include property acquired by bequest, devise, or inheritance. Also, assets, where the debtor is the beneficiary of a life insurance policy or death benefit plan, are the property of a bankruptcy estate. The time period for the acquisition of these assets triggering inclusion in the bankruptcy estate is 180 days from the bankruptcy filing.
Many bankruptcy cases have nothing in their bankruptcy estates. These are considered “no asset” cases, where every asset is exempt, or the non-exempt assets have too little value to merit sale and the distribution of proceeds to creditors. Most bankruptcy cases are “no asset” cases.
The Morrison Law Group can help if you just need to talk about your Chapter 7 or Chapter 13 bankruptcy options. Call 801.456.9933 today to schedule a FREE consultation. We have locations in Ogden, Logan, Sandy, and St. George to serve the residents of the counties of Weber, Cache, Salt Lake, Utah, Morgan, Davis, Washington, and surrounding areas.