August 25, 2021
Authored by: Brian Walsh
My most recent post surveyed situations in which a debtor might lose assets, or see their value drop to zero, during a bankruptcy case. This article addresses the opposite circumstance: how might a debtor’s estate gain new assets after a bankruptcy filing?
First, the basics. In general, the bankruptcy estate consists of “all legal or equitable interests of the debtor in property as of the commencement of the case.” 11 U.S.C. § 541(a)(1). Two provisions capture certain general categories of assets that materialize post-petition: proceeds, products, offspring, rents, or profits from property of the estate, and interests in property acquired by the estate. Id. § 541(a)(6), (7). Thus, a typical Chapter 7 estate does not include post-petition assets, other than the proceeds of property sold by the trustee. Because a debtor in Chapter 11, 12, or 13 ordinarily continues to generate income, the