In short
Filing for bankruptcy creates an estate made up of all the debtor's legal and equitable interests in property at the filing date, plus certain property, such as inheritances, received within 180 days after filing.
Key takeaways
- Individual debtors can exempt certain property, such as some home equity and personal items.
- Property the trustee recovers, such as preferential transfers, is added to it.
- Most wages earned after filing in Chapter 7 aren't part of it.
Where it's tested
REG: Debtor-Creditor & Bankruptcy — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
A creditor takes a purchase money security interest in equipment and files a financing statement 15 days after the debtor receives possession. An earlier creditor had already perfected a security interest covering all of the debtor's equipment. Who has priority in the new equipment?