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The general definition of estate property contained in 11 U.S.C. 541(a) is intentionally broad to ensure that all assets are included in the bankruptcy estate, prevent asset hiding or exclusion, and allow for flexibility in interpreting what constitutes estate property.
Section 551 is adopted from the House bill and the alternative in the Senate amendment is rejected. The section is clarified to indicate that a transfer avoided or a lien that is void is preserved for the benefit of the estate, but only with respect to property of the estate.
The bankruptcy estate is the pool of assets that will be used to satisfy the claims of creditors. Generally, all of a debtor's legal and equitable interest in property as of the filing of the bankruptcy petition and commencement of the bankruptcy case becomes property of the bankruptcy estate.
The Texas Pattern Jury Charges series is widely accepted by attorneys and judges as the most authoritative guide for drafting questions, instructions, and definitions in a broad variety of cases.
He policy behind the trustee's "avoiding powers" is: To provide the most equitable distribution to creditors of a debtor's assets. A statutory lien may never be avoided in bankruptcy. A trustee in bankruptcy acquires the avoiding powers as of the date a bankruptcy petition is filed.
Under 11 U.S.C. §541, a debtor has an interest in property even if the property is fully encumbered by liens and the debtor has only an equitable or possessory interest.
Property of the estate is defined broadly to include all tangible and intangible property. Tangible property includes all types of physical property that a debtor owns or has an interest in, such as machinery, equipment, inventory, furniture, and fixtures.