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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 Virginia, 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 legal or equitable interests of the debtor in property at the time the bankruptcy case is filed. The estate may also include property that is in the possession of someone else but in which the debtor has an interest. The purpose of the estate is to gather the debtor's assets to pay off creditors. However, not all property is included in the estate; debtors are allowed to keep exempt property under both federal bankruptcy exemptions and Virginia's state exemptions. The specific exemptions available may vary, and debtors in Virginia can choose between state and federal exemptions. The nonexempt assets in the estate are liquidated and used to repay the debtor's creditors according to the rules of the bankruptcy process.

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Bankruptcy

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Bankruptcy

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