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 Georgia, 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 the debtor has an interest in, even if it is held by someone else. 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. Georgia has specific exemptions that allow debtors to keep certain property out of the estate, intended to let individuals maintain a basic standard of living despite bankruptcy. These exemptions are outlined in the Official Code of Georgia Annotated (O.C.G.A.) and can include items like a portion of home equity, personal property, retirement accounts, and more. Creditors are generally paid from the assets that are not exempt under state law.