The bankruptcy estate includes all of a debtor's legal and equitable interests (including real and personal property) as of the commencement of the bankruptcy case. A debtor, when filing bankruptcy, can claim certain property exempt from the bankruptcy estate. Property that is unable to be exempted is liquidated in a Chapter 7 to pay the administrative costs of the proceeding and the claims of creditors according to their priority.
a debtor's legal and equitable interests in property as of the commencement of a bankruptcy case.
The estate is created by the filing of a petition and is comprised of all of the property rights of the debtor as of the commencement of the case. An individual debtor may claim certain property as exempt, and if the exemption is valid, the property is removed from the estate and returned to the debtor.