Bankruptcy Estate – What Is It and What Does It Include?

When we talk about bankruptcy proceedings, the term “bankruptcy estate” often comes up — discussions revolve around what is and isn’t included in the estate. But what exactly does this term mean?

What is the bankruptcy estate? 

The bankruptcy estate includes everything you own that can be used to repay debts. The key date for determining the assets that form the bankruptcy estate is the date of the bankruptcy declaration — that is, the day the court issues the ruling declaring bankruptcy.

Understanding what constitutes the bankruptcy estate allows you to better prepare for the proceedings and protect your interests. Knowing which assets will be available to creditors — and which can remain in your possession — provides clarity and predictability.

In summary, the bankruptcy estate consists of all assets belonging to the debtor as of the date of the bankruptcy declaration. Now, let’s move on to the details.

What is not included in the bankruptcy estate? 

Understanding the exclusions from the estate is essential to protecting what matters most to you and your family — everyday household items, essential tools for earning a living, and public benefits that support your household budget. These exclusions can help preserve your dignity and stability during the bankruptcy process.

1. Exemptions under the Code of Civil Procedure

Assets excluded from enforcement under the Polish Code of Civil Procedure are not included in the bankruptcy estate. In simple terms: if a bailiff cannot seize something, it will also not be included in the estate. This is especially important for individuals, as the list of exemptions includes:

• household furnishings,

• bedding,

• underclothing and everyday clothing,

• tools and items necessary for personal income-generating work,

• social welfare benefits,

• the child benefit (known as “800+”).

2. Company Social Benefits Fund (ZFŚS)

Funds set aside to support the bankrupt’s employees and their families — held in a separate bank account — do not form part of the bankruptcy estate.

3. Petition to exclude items from the bankruptcy estate

There may be situations where it is unclear whether a particular item should be included in the estate due to its nature or because its legal status is not explicitly defined. In such cases, the trustee, the bankrupt, or a creditor may apply to the supervising judge (judge-commissioner) for clarification.

Can I request the exclusion of items from the bankruptcy estate? 

Yes. Beyond the statutory exclusions, the law allows you to petition the judge-commissioner to exclude specific items from the bankruptcy estate. For example, this could include a vehicle necessary to transport a disabled child to therapy. The judge-commissioner is required to rule on the application — ideally within one month.

If the petition is denied, you can file a separate claim in the bankruptcy court, seeking the exclusion of the item through litigation.

You have the right to protect what’s most important to you. If, for example, a car is essential for caring for a family member, you can seek to have it excluded from the bankruptcy estate. This legal tool can help safeguard key elements of your daily life. Our law firm can advise you or assist in preparing such a petition.

What if I can’t locate all the documents related to my assets? Proceed with what you have. It may turn out that you already possess the key documents needed to resolve the matter. If you’re unsure whether what you have is sufficient, we’re here to help.

Summary

The bankruptcy estate is the totality of assets belonging to a person or business on the date of the bankruptcy declaration. However, not everything is included — the law provides significant exclusions, such as property exempt from enforcement, ZFŚS funds, and certain public benefits. Additionally, you may request the exclusion of specific assets if they are essential to your daily life.

If you have questions about the bankruptcy estate, contact a legal advisor specializing in bankruptcy law. With professional support, you can better protect your interests and navigate the proceedings effectively. Our law firm can represent you throughout the process and assess your case before filing for bankruptcy.

FAQ – Frequently Asked Questions

What is the bankruptcy estate?

It is the total value of assets owned by a person declared bankrupt on the date of the court’s bankruptcy ruling. These assets are used to satisfy the creditors.

Does everything I own become part of the bankruptcy estate?

No. Items excluded from enforcement (e.g., essential household items, everyday clothing, social benefits), ZFŚS funds, and items necessary for work are not included in the estate.

Can I request that something be excluded from the estate?

Yes. You can petition the judge-commissioner to exclude specific assets, such as items essential to daily living or caregiving responsibilities. If denied, you have the right to file a separate lawsuit in bankruptcy court.

What if I’m not sure whether something belongs to the bankruptcy estate?

In cases of doubt, the trustee, bankrupt, or a creditor may apply to the judge-commissioner for a ruling on the status of a given asset.

Is the child benefit (800+) included in the bankruptcy estate?

Nie, świadczenia wychowawcze są wyłączone z masy upadłości, co oznacza, że nie mogą być przejęte na pokrycie zobowiązań w postępowaniu upadłościowym.