When a bankruptcy petition is filed, does all the property of the debtor go into the bankruptcy estate?
Not in all cases. The Bankruptcy code allows an individual debtor (not a partnership, corporation, or other) to retain certain 'exempt' items of property and not to have those items included in the bankruptcy estate. The exempt items are subject to any valid liens or other encumbrances. The federal government and each state government may have different lists of qualified exempt properties and the individual debtor can choose which list to exclude (if the state allows a choice between the two lists). The lists of exempt properties vary among the states but most include equity in a home or car, tools of the trade (allowed if retention would help the debtor to improve financial position), and some personal effects (such as ordinary clothing and personal items of small value). Certain retirement and pension plans are exempt but special rules apply depending on the category of the plan.
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Not in all cases. The Bankruptcy code allows an individual debtor (not a partnership, corporation, or other) to retain certain 'exempt' items of property and not to have those items included in the bankruptcy estate. The exempt items are subject to any valid liens or other encumbrances. The federal government and each state government may have different lists of qualified exempt properties and the individual debtor can choose which list to exclude (if the state allows a choice between the two lists). The lists of exempt properties vary among the states but most include equity in a home or car, tools of the trade (allowed if retention would help the debtor to improve financial position), and some personal effects (such as ordinary clothing and personal items of small value). Certain retirement and pension plans are exempt but special rules apply depending on the category of the plan.
