Timing is Everything: Sixth Circuit Reverses Bankruptcy Court and Rules that Lawsuit Settlement is Not Property of the Debtor's Estate

When
someone files for bankruptcy, an estate is created that consists of, among
other things, any and all assets owned by, or to which the debtor filing the
bankruptcy case has a right to or interest in. This includes tangible
things such as real estate, vehicles, money, clothing, and jewelry, as well as
rights to property such as litigation claims.
In a
Chapter 7 case, all assets belong to the trustee on the date a case is filed
unless an exemption is claimed, and the trustee gets to keep, sell or otherwise
administer assets for the benefit of creditors.
When
it comes to determining "property of the estate," timing is
important. Generally speaking, a debtor gets to retain property acquired after
the bankruptcy filing occurs. Read More ›
Tags: 6th Circuit Court of Appeals, Chapter 7