Commencement of a bankruptcy case creates an estate. The estate technically becomes the temporary legal owner of all the debtor's property. It consists of all legal or equitable interests of the debtor in property as of the commencement of the case, including property owned or held by another person if the debtor has an interest in the property. Generally speaking, the debtor's creditors are paid from nonexempt property of the estate.

In Arizona, as in other states, the commencement of a bankruptcy case results in the creation of a bankruptcy estate, which is a central concept in bankruptcy proceedings. This estate is comprised of all the debtor's legal or equitable interests in property at the time the bankruptcy case is filed. The estate includes not only property directly owned by the debtor but also property that others may hold if the debtor has an interest in it. The estate is managed by a bankruptcy trustee, who is appointed to oversee the case. The trustee has the authority to liquidate nonexempt assets of the estate to pay the debtor's creditors. Arizona has its own set of exemptions that determine what property a debtor can keep as exempt from the estate. These exemptions are outlined in the Arizona Revised Statutes and can include items like a primary residence, personal property, and retirement accounts, up to certain values. Creditors are generally paid from the nonexempt assets of the estate, and the order of payment follows the priority rules established by federal bankruptcy law.