Chapter 7 Bankruptcy and the 180-Day Rule

Chapter 7 Bankruptcy and the 180-Day Rule "When a debtor files for bankruptcy, he must identify all of his assets. Property can be difficult to define at times. Your property consists of your home, automobile, apparel, jewelry, and electronic devices. This term includes intangible assets such as financial accounts, patents, accounts receivable, and client listings. All of the debtor's property must be enumerated in the schedules that accompany the bankruptcy petition.On Schedule C, the debtor specifies their available exemptions. Exemptions are laws that permit debtors to prevent creditors from seizing their property in order to satisfy a judgment. Every jurisdiction has its own exemptions. Additionally, the Bankruptcy Code provides a list of exemptions available to debtors in certain states. In bankruptcy, all property protected by these exemptions remains the debtor's property following the conclusion of the case. Outside of the quantities or categories protected by exemptions, all property becomes part of the bankruptcy estate. The trustee can liquidate the unprotected assets and distribute the proceeds to the creditors listed on the bankruptcy schedules.The bankruptcy estate is not restricted to the property possessed at the time of filing. Within 180 days of filing for bankruptcy, if a debtor becomes entitled to a windfall, such as a lottery win or an inheritance, this property may become part of the bankruptcy estate. It is essential to understand that the date the debtor becomes entitled to the money or property is what matters, not when they actually receive it. If the property comes from a source that renders it exempt, it remains the debtor's property regardless of the 180-day rule.
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