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 Texas, as in all states, the commencement of a bankruptcy case creates a bankruptcy estate, which is a central concept in bankruptcy proceedings. This estate is comprised of virtually all of the debtor's assets and interests in property as of the filing date. The estate is managed by a bankruptcy trustee, who is appointed to oversee the case. The trustee has the authority to gather and liquidate the debtor's nonexempt assets to pay off creditors. Texas has its own set of exemptions that a debtor can choose instead of federal exemptions, which may protect certain assets from being included in the bankruptcy estate and sold off to pay creditors. These exemptions typically cover basic necessities such as homestead, personal property, and retirement accounts, among others. The specific assets that are exempt and the amount of the exemption are defined by Texas state law. It's important for debtors to understand which of their assets are exempt and nonexempt when filing for bankruptcy, as this will affect what property they can retain and what will be used to repay creditors.