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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 Maryland, as in all states, the commencement of a bankruptcy case creates a bankruptcy estate, which plays a central role in the process. 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 is considered a separate legal entity and temporarily 'owns' the debtor's assets. It includes not only property directly owned by the debtor but also property held by others in which the debtor has an interest. The purpose of the estate is to ensure that the debtor's nonexempt assets are distributed fairly among creditors. Maryland has its own set of exemptions that determine which of the debtor's assets are protected from being sold off to pay creditors. These exemptions are outlined in the Maryland state statutes and can differ from federal bankruptcy exemptions. Creditors are typically paid from the nonexempt assets of the estate, following the priority rules established by the Bankruptcy Code.

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Bankruptcy

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Bankruptcy

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