Questions & Answers
Table of Contents
Our most common questions asked:
WHICH IS BETTER FOR ME, CHAPTER 7 OR CHAPTER 13?
The decision regarding which chapter to proceed under is extremely important. Every client’s situation is different and the correct choice depends on the particular facts of that client’s case. There are positives and negatives to filing under either chapter, so it is very important that you be completely candid and forthcoming when discussing your case with your attorney. Remember: an attorney’s advice usually is only as good as the information it is based upon.
WHAT IS THE “BANKRUPTCY ESTATE”?
Immediately upon the filing of a bankruptcy petition, the bankruptcy estate is created. In Chapter 7, it consists of all of the debtor’s assets at the time the case is filed (except assets which are statutorily excluded or claimed exempt). It also includes inheritances, life insurance proceeds, and property settlements, which the debtor becomes entitled to within 6 months after the case is filed. See 11 U.S.C. Section 541. The bankruptcy estate in Chapter 13 includes all of the property which would be included in a Chapter 7 estate, plus any property the debtor acquires after the case is filed and while the case is pending. See 11 U.S.C. Section 1306.
The bankruptcy estate is very expansive and falls within the Bankruptcy Court’s exclusive in rem jurisdiction. Consequently, debtors may not dispose of, sell, quitclaim, pledge, gift, trade-in, or otherwise transfer property of the bankruptcy estate without first obtaining the Court’s authorization.