Exemptions In A Bankruptcy Filing

A bankruptcy estate is created upon the filing of a bankruptcy petition in an individual or joint bankruptcy matter. The estate encompasses everything that you own (your legal, tangible and equitable interests) on the date of filing. Exemptions and exclusions are decided at a later date.

A bankruptcy estate is not the same thing as the estate of a deceased individual in the estate planning and administration sense of the word. A bankruptcy estate is like a snapshot of your assets, property, debts and overall financial situation at the time of the filing of the Chapter 7, Chapter 13 or Chapter 11 bankruptcy.

It's important to know that the contents of your estate may vary from state to state. In Kentucky, federal laws are used to govern what property will be considered exempt while Indiana uses state laws for its exemptions. An experienced bankruptcy lawyer can provide you with a detailed analysis of what may happen to your estate when you file for bankruptcy, including what property you will be able to keep and what property may be subject for liquidation.

For more than 30 years, the attorneys at Kruger & Schwartz have handled a wide variety of bankruptcy issues, including those that arise when determining a bankruptcy estate and property exclusions and exemptions. When you obtain our services, we guide you through this part of the bankruptcy process, making sure you do things right the first time around.

Determining The Property Of A Bankruptcy Estate

State laws govern the determination of available assets, property rights and potential interests of the debtor. However, it is federal law that determines when property and assets are considered property of a bankruptcy estate.

It is important to determine what property belongs to the bankruptcy estate and what does not. Property of the estate is within the exclusive jurisdiction of the court and is protected by an automatic stay created by the bankruptcy filing.

Property Fully Excluded From A Bankruptcy Estate

There are very few situations in which property or assets are excluded from the estate. These exclusions can include:

  • Property in which the debtor only holds the legal title and no equitable interest
  • Spendthrift trusts and other trusts (in some instances)
  • Most-qualified retirement plans

Property Which May Be Partially Exempt From A Bankruptcy Estate

Some property may be partially exempt from the bankruptcy estate, up to a certain dollar amount, such as:

  • Homesteads
  • Vehicles
  • Clothes
  • Household goods and furnishings
  • Personal injury claims
  • Life insurance

Contact Our Firm To Learn More

At Kruger & Schwartz, our lawyers use their considerable experience to clearly explain how your property and debts will be treated during bankruptcy proceedings and they will guide you through every step of the bankruptcy process from beginning to end.

To see how our firm can help you, call our Louisville, Kentucky, office at 502-485-9200, our New Albany, Indiana office at 812-945-9200 or toll free at 866-366-3328. All initial consultations are free and occur with one of our highly trained bankruptcy attorneys. Call now or send us an email to schedule your appointment today.