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 Wisconsin, 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. This includes not only property directly in the debtor's name 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 to creditors in accordance with federal bankruptcy laws and Wisconsin's exemption statutes. Exempt property is that which the debtor is allowed to keep and is protected from creditors. The specifics of what property is considered exempt are determined by Wisconsin state law, which provides a list of exemptions, and in some cases, debtors in Wisconsin may choose to use federal exemptions instead. The process of paying creditors from the nonexempt assets of the estate is overseen by a bankruptcy trustee, who administers the estate for the benefit of the creditors.