Who Is the Bankruptcy Trustee?
Individuals who are considering filing for bankruptcy often have many questions about the process itself, beyond how their debt will be affected. Clients who are unfamiliar with the bankruptcy procedure may not be aware of all the people who will play a part in their bankruptcy case. Your bankruptcy lawyer can explain all of this to you. One such person your lawyer will likely tell you about, and who has a large role in bankruptcy proceedings, is the trustee.
Every Chapter 7 or Chapter 13 bankruptcy case has a trustee appointed who is responsible for overseeing the petition. The trustee will represent the interest of the creditors named in the bankruptcy petition but is also supposed to remain impartial.
Generally, trustees will evaluate a debtor’s bankruptcy petition and ensure that the information it contains is accurate and truthful and that the debtor has appropriately gone through all of the relevant information with their attorney. This part of the process will likely involve the debtor verifying facts under oath. The trustee is tasked with compensating the debtor’s creditors as much as possible through the bankruptcy case.
What Does the Trustee Do?
The trustee’s role varies slightly depending on whether the bankruptcy case is a Chapter 7 or a Chapter 13.
Trustee in Chapter 7
In addition to the above responsibilities, a trustee who is appointed to a Chapter 7 bankruptcy case also has the following duties:
- Selling the debtor’s assets that were not listed as those exempt in the bankruptcy petition.
- Evaluate the debtor’s property in order to determine if there are any nonexempt assets eligible to be sold to pay creditors.
- Ensuring that the debtor did not transfer property improperly to a third party before filing his or her bankruptcy petition and voiding such transfer if it did occur to distribute the proceeds among all creditors.
- Ensuring that the debtor did not make any disproportionate payments to preferred creditors and voiding such payment if it did occur to distribute the money evenly among all creditors.
Trustee in Chapter 13
A trustee assigned to a Chapter 13 case has the general duties outlined above, and is also responsible for the following:
- Reviewing the debtor’s proposed repayment plan to ensure it is fair to creditors.
- Attending the meeting of creditors, where he or she will ask the debtor questions under oath about the information alleged in the bankruptcy petition.
- Accepting payments from the debtor in accordance with the approved repayment plan and transferring the appropriate funds to creditors.
- Evaluating any proof of claim documents filed by creditors, as well as objecting to claims that are not timely or otherwise properly filed by creditors.
Contact a Bankruptcy Law Firm Today
If you are struggling with debt and considering bankruptcy, call an experienced attorney.