When you file a bankruptcy, you no longer own your own goods. They pass into a bankruptcy estate owned by a trustee, who is supposed to act for the good of your creditors.
This means that a debtor generally does not have the right to sell his own assets between filing bankruptcy and getting a discharge.
In chapter 7, or liquidation, bankruptcies, the trustee has the duty to investigate your assets and determine what he may sell off to satisfy creditor claims. Usually, because of the exemptions provided by state law, there is nothing to sell off. The debtor continues on his or her way by shedding debts but not goods. We call these “no-asset cases.”
In chapter 13 bankruptcies, which involve a personal reorganization, there are two trustees: the debtor himself, and the chapter 13 trustee. Here, the bankruptcy estate includes the next five years of the debtor’s income. The debtor keeps legal title to goods, and the chapter 13 trustee ensures that the debtor is making his best efforts toward paying into the plan.
In chapter 11 bankruptcies, the debtor is also the trustee, a position known as the “debtor-in-possession.” In corporate cases, the company’s former management may continue to serve as the debtor-in-possession; in cases of willful mismanagement, the court may oust the former management and install a new trustee.