Property of the Debtor protected by the bankruptcy filing
PROPERTY OF THE ESTATE and PROPERTY EXCLUDED FROM THE ESTATE
When a bankruptcy is filed the person filing is called the Debtor. The filing creates an estate called the bankrupt estate, and all of the Debtor’s property is placed in this estate and the Property of the Debtor Protected. This property includes all the Debtor owns or is entitle to receive. The property is protected by a stay in order to allow the creditors to recover what the Bankruptcy Code allows in a fair and reasonable way rather than allowing the creditors to attach the property in a piecemeal fashion. This also allows the Debtor to get a fresh start free from debt.
PROPERTY EXCLUDED FROM THE ESTATE
- Any power that the Debtor may exercise solely for the benefit of another such as for an elderly relative or a young or special needs child.
- Any interest of the Debtor under a commercial lease that has ended before the bankruptcy has been filed.
- Eligibility of the Debtor to participate in student loan, scholarship, and/or grant programs or any program authorized by the Higher Education Act of 1965.
- The interest of the Debtor in gas rights that has been transferred prior to the bankruptcy filing, although funds received and which the Debtor is entitled to receive may be part of the bankrupt estate.
- Funds placed in an education retirement account at least one year before the bankruptcy filing and otherwise within the limits permitted by the Internal Revenue Code. See sections 530(b)(1) and section 4973(e) of the Internal Revenue Code for details
- Funds used to purchase a tuition credit. See section 529(b)(1)(A) of the Internal Revenue Code for details.
- Funds contributed to a tax sheltered retirement fund or program including an employee benefit plan, deferred compensation, annuity, or health insurance plan, and withheld from wages or contributed by an employer.
- Social Security Benefits: The right to receive Social Security benefits is not part of the bankruptcy estate as set forth in section 207 of the Social Security Act cited below. Through this law Congress has protected the right our elder and disabled Americans. Social Security payments can or may be subject to lawful withholding.
SEC. 207. [42 U.S.C. 407] (a) The right of any person to any future payment under this title shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this title shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.
(b) No other provision of law, enacted before, on, or after the date of the enactment of this section, may be construed to limit, supersede, or otherwise modify the provisions of this section except to the extent that it does so by express reference to this section.
Call bankruptcy lawyer C. Stephen Gurdin Jr. at his Wilkes-Barre office today at 570.826.0481, toll free at 800-221-0618, fax 570-822-7780, email Stephen@gurdinlaw.com to schedule a free consultation.
Regular Office hours 2:30 and 7 p.m. Monday through Friday by appointment. * Earlier appointments available upon request.