Sacramento Bankruptcy Attorney talks about Property of the Estate Acquired Post-Petition in a Chapter 11 filing
Sacramento Bankruptcy Attorney talks about Property of the Estate Acquired Post-Petition in a Chapter 11 filing
Most debtors understand that when they file a petition for bankruptcy under Chapter 11 that a new legal entity referred to as an “estate” is created, which is an entity that is separate and apart from the debtor. The “estate” is broadly defined by federal bankruptcy law to cover nearly all of the debtor’s property that he or she has an interest in at the time the petition is filed. What debtor’s who file for bankruptcy under Chapter 11 may be surprised to know is that 11 USC § 1115 provides that all property covered under 11 USC § 541 that the debtor acquires after the petition is filed and before the case is closed, dismissed, or converted to a case under chapter 7, 12, or chapter 13, is included in the property of the estate. In addition to all property acquired after the date the petition is filed, earnings from services performed by the debtor after the commencement of the case are also the property of the estate. This definition of “estate” applies to all Chapter 11bankruptcy filings effective 180 days after April 20, 2005. It is important for debtors who file Chapter 11 bankruptcy to understand that the property they acquire after filing the petition, including earned income, will most likely be considered property of the estate. Furthermore, debtors who file for bankruptcy under Chapter 11 generally must use property acquired post-petition to fund their reorganization plan, regardless of whether the property is technically considered property of the estate.
If you have a question regarding Bankruptcy please contact Sagaria Law at 1-800-941-6730 for a free consultation or visit us at www.sagarialaw.com. Our team of Bankruptcy Lawyers can assist you with all aspects of your case. If you are have questions about filing a chapter 7 bankruptcy, a chapter 13 bankruptcy, lien stripping, discharging debt, etc. we can help! We have bankruptcy lawyers in San Mateo, Fremont, Sacramento and San Jose.
