(See Also Bankruptcy Estate) Property which is included in the estate is outlined in Section 541 of the United States' Bankruptcy Code and can include a wide variety of assets or property the debtor owns. There are property exceptions but these are narrowly defined and do not generally occur in a normal consumer bankruptcy. Property which does not become property of the estate includes the exempt property outlined in Federal or State bankruptcy law (unless an objection is filed by the trustee and the court disallows the exemption). All exempt property must be listed on Schedule C of the bankruptcy official forms.
The bankruptcy estate is created at the time the bankruptcy petition is filed by the debtor. Section 301 outlines the process for an individual filer and Section 302 outlines the process for a joint debtor. Involuntary bankruptcy petitions function in a different manner and the specifics should be discussed with a bankruptcy lawyer. U.S.C. Sec. 541(a)(1) allows for all equitable and legal interests of the filer to become part of the bankruptcy estate at the time the Chapter 7 and Chapter 11 bankruptcy petitions are filed (exceptions do exist). Equitable and legal interests will include property that was part (or could have been part) of the estate at the time of the filing or property the debtor will acquire within 180 days from the bankruptcy filing date. This can include property from a divorce decree, an inheritance or a life insurance settlement. Certain assets are not legally considered part of a bankruptcy estate including: pensions, 401K plans, life insurance policies or annuities. Exemptions vary by state. Talk to a bankruptcy lawyer about which exemptions are allowed and which exemptions are not allowed in your bankruptcy estate.