When you file for bankruptcy protection, all interests you have in property at the time you file become part of the Bankruptcy estate. The Bankruptcy Trustee controls all of your property at the time of your Bankruptcy filing so that it can be distributed (paid to) to your creditors, unless that property is not part of the Bankruptcy estate as discussed below.
Not Part of the Missouri Bankruptcy Estate
There are several exceptions when your property that does not become part of your Bankruptcy estate. If your property is not part of your bankruptcy estate, then the Trustee can’t distribute it (pay it) to your creditors. The following are some examples of what property does not become part of your Bankruptcy estate:
- Retirement Plans: If you have retirement plans that are qualified under ERISA and the Internal Revenue Code such as pension, profit-sharing and individual retirement accounts (IRA’s both conventional and Roth), these are not part of your bankruptcy estate.
- Property Held by Spouses as Tenancies by the Entirety: If Missouri spouses hold title to real and personal property under “tenancy by the entirety”, then creditors of one spouse can’t reach the other spouse’s interest in the property and that property is not part of the bankruptcy estate.
- Power that You Can Use for the Benefit of Another: An example of this is if you, as the debtor, deposited money into a custodial account solely for the benefit of your children. That custodial account would become the children’s account under Missouri Transfer to Minors Law and would not be part of your bankruptcy estate.
- In a Chapter 7 Bankruptcy, Post-Petition Earnings: Any money that you earn after your Chapter 7 Bankruptcy petition filing does not become part of your Bankruptcy estate. This includes any property that you buy after your Chapter 7 Bankruptcy filing with money you earned after you filed. (However, if you file a Chapter 13 Bankruptcy, your earnings after you file for bankruptcy protection are part of your Bankruptcy estate.)
- Property Rights Which Have Been Terminated Before You Filed: If your property rights have terminated or been cut off before the filing of your Bankruptcy case, the Trustee generally has no rights in the property.
- Contracts for Deed: Sometimes people “buy” real estate under a contract for deed, which is where the “buyer” eventually owns the real estate if all the payments are made. Since the “buyer” does not truly own the property until after all the payments are made, that real estate is not part of the Bankruptcy estate.
- Other Property: In some situations, other property may not be part of your bankruptcy estate, but this is something you would need to discuss with your Kansas City Bankruptcy attorney at Troppito Miller Griffin, LLC.
Kansas City Bankruptcy Attorneys Troppito Miller Griffin, LLC, Handle These Complicated Bankruptcy Issues
As you can see from the above, there is a lot of legal judgment involved in deciding what property the Bankruptcy trustee has no right to pay to your creditors. Since Bankruptcy is so complicated, you need the trusted and experienced Kansas City Bankruptcy attorneys at Troppito Miller Griffin, LLC to properly advise you and to make sure that you keep as much of your property as you can.