subject: Is Your Salary Part Of Your Bankruptcy Estate? [print this page] Is Your Salary Part Of Your Bankruptcy Estate?
Bankruptcy puts your assets at risk. For example, when your bankruptcy filing is approved, the whole of your bankruptcy estate is considered as the bankruptcy trustee makes the decision as to which of your items are to be liquidated to pay back creditors. So what exactly is your bankruptcy estate?
In essence, your bankruptcy estate is every asset of value that you own or have the rights to. It is not necessary that you have physical possession of the item. It is simply required that you own the rights to it.
At times this can be confusing. But what it basically indicates is that if you have property or land that is out of state, it is still considered to part of your estate. It also means that any and all banking and checking accounts, all transportation vehicles you may own, stocks, bonds, and other financial instruments. It even applies to the things that you own inside of your home such as furniture, kitchen appliances, and so on. The bankruptcy is empowered to liquidate any and all of these items to repay the creditors.
Merely having possession does not count. That is, items that you merely happen to have in your possession will not be considered part of your estate. For example, if a member of your family has loaned you the use of his car for a while, the car is not owned by you and therefore not considered part of your estate.
The kind of state that you live in makes a difference as well. For example, if, by chance, you happen to live in a community property state, the situation is a bit stickier. In this instance, all property that is owned jointly by you and your spouse is considered part of your bankruptcy estate and therefore subject to being liquidated. Any items that your spouse owns individually from you, however, is not considered part of your bankruptcy estate and therefore, not subject to liquidation.
But what if you are owed monies that you have not yet received? According to the law, assets that you don't yet have, but are entitled to receive are also considered part of your bankruptcy estate. For example, if you are a recording artist and have earned royalties of $10,000 that you have not received, that $10,000 is considered part of your bankruptcy estate, even though you haven't received it yet.
The situation is similar if you are a salesman who has made a lot of sales but, to date, has received no commissions. And for salaried employees who have worked for a number of weeks but have not yet received their paycheck. In other words, any monies or properties that are due to you are part of your bankruptcy estate and can be subject to being liquidated.
It is essential that you knowing what your assets before you file for bankruptcy. If you don't know, you should contact a bankruptcy attorney to help him sort out the details.
