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Bankruptcy

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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 North Carolina, as in other states, the commencement of a bankruptcy case results in the creation of a bankruptcy estate. This estate is considered the temporary legal owner of the debtor's assets. The estate includes all of the debtor's legal or equitable interests in property at the time the bankruptcy case begins. This encompasses not only property directly owned by the debtor but also property held by others in which the debtor has an interest. The process is governed by federal law, specifically the U.S. Bankruptcy Code, which North Carolina adheres to. The bankruptcy trustee manages the estate and liquidates nonexempt assets to pay the debtor's creditors. North Carolina has its own set of exemptions that a debtor can choose instead of the federal exemptions, which determine what property the debtor can keep as exempt from the estate. Creditors are generally 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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North-Carolina State Code

Bankruptcy

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North-Carolina State Code

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