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 Oregon, 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 becomes the temporary legal owner of the debtor's assets and includes all of the debtor's legal or equitable interests in property at the time the bankruptcy case is filed. The estate is not just limited to property directly in the debtor's name; it also encompasses property that others may hold but in which the debtor has an interest. The purpose of the estate is to ensure that the debtor's assets are managed and liquidated under the supervision of the court to pay off creditors. Creditors are generally paid from the nonexempt assets within the estate. Exemptions are governed by both federal bankruptcy law and Oregon state law, which provide a list of assets or property that the debtor is allowed to keep from the estate, meaning these assets cannot be used to pay creditors. The specific exemptions available can vary, and debtors in Oregon may choose between state and federal exemptions depending on which set is more advantageous for their situation.