How to Calculate Bankruptcy Estate

Generally speaking, a bankruptcy estate is the total value of all of your property on the date that you file for bankruptcy protection. For the most part, any property that you acquire the right to after you file for bankruptcy is not part of the bankruptcy estate. Each state allows a certain number of exemptions from the bankruptcy estate, including, for example, a homestead exemption for a primary residence.

Things You'll Need

• List of all property you own and possess
• List of all property you own but don't possess
• List of all property you have the legal right to receive
• Property value worksheet

Instructions

1. Inventory all of the property you own and possess, own but don't possess, and don't currently own but have the legal right to receive. Property you have the legal right to receive includes such things as earned but unpaid wages, legally due tax refunds, and property you have inherited but have not received.

2. Estimate the current replacement value of each item of property in your bankruptcy estate. This means you have to estimate what it would cost to buy a replacement for each piece of property you own, such as televisions, cars and real estate.

3. Reduce the value of each of your properties that you own jointly with another person. For example, if you and your spouse jointly own a car, you only claim half the value of the car, unless you and your wife are filing bankruptcy jointly.

4. Insert each property's estimated replacement value on the property value worksheet.

5. Add up the individual property values to get a combined total estate value.

6. Review your state laws on allowable exemptions. Each state has its own exemption laws, so you have to check your state's laws on what is allowed.

7. Total your exemptions and reduce this amount from your combined property value. The amount you have left is your bankruptcy estate.

Tips & Warnings

• To understand exemptions you have to check your state's homestead laws. Some states require you to claim the state law exemptions while other states allow you to choose between the state's exemptions or the federal exemptions. Most states permit, at the very least, a homestead exemption, insurance exemption, personal property exemption and, in some states, a wild card exemption that you can claim on anything.

• Community property states present complications in calculating the bankruptcy estate. All property acquired during the marriage is considered owned jointly by each spouse, which means you have to claim the full value of community property even if you are filing separately from your spouse.

References

• Nolo's The New Bankruptcy: Will It Work For You?; Stephen Elias; 2009
• U.S. Courts: Bankruptcy Basics

Resources

• U.S. Courts: Bankruptcy Forms