Can property received under a separation agreement after bankruptcy become property of the estate?
Generally, the property of the estate for bankruptcy purposes is determined as of the date of filing bankruptcy. 11 U.S.C. 541. Property of the estate is very broad and includes every type of legal and equitable interest that the debtor has in every type of property. It also includes community property of the debtor and the debtor’s spouse that is under the sole, equal, or joint management and control of the debtor, or subject to a claim against the debtor or the debtor and his or her spouse. Property of the estate also includes interests in property recovered by the trustee as unreasonably excessive bankruptcy legal fees for debtor representation, 11 U.S.C.329(b), bid rigging in a sale of property, 11 U.S.C. 363(n), , from a custodian of property of the estate, 11 U.S.C. 543, from transferees of avoided transfers such as statutory liens, preferences and fraudulent transfers, 11 U.S.C. 550, of certain mutual offsets resulting in an “insufficiency” within 90 days before filing, 11 U.S.C. 553, and claims of partnership against general partners, 11 U.S.C. 723.
Earnings from services performed by the individual debtor after filing are not property of the estate, but property of the estate does include post-petition proceeds, products, offspring, rents and profits of property of the estate.
Property of the estate includes property acquired within one hundred eighty (180) days after filing by bequest, devise, or inheritance, as the beneficiary of a life insurance policy, and as a result of a property settlement agreement with the debtor’s spouse, or of an interlocutory or final divorce decree. These latter provisions were intended to discourage someone from discharging debts in anticipation of receiving money or property from an inheritance, life insurance policy, or the terms of a separation agreement or divorce decree.
You should consult with your Virginia bankruptcy or divorce attorney to discuss whether property of your bankruptcy estate will include any property from your separation or divorce.