The Role of a Trustee in a Bankruptcy Case
Ok, you are getting a fresh start on your financial situation and have filed for bankruptcy. One of the major players that you are going to be interacting with is a bankruptcy trustee. A bankruptcy trustee is a lawyer assigned to oversea your bankruptcy case. Their role in the case differs as to whether your bankruptcy case is Chapter 7 or Chapter 13.
Chapter 7 Trustees
In a Chapter 7 liquidation case, a trustee is selected at random from a panel of lawyers. Their main goal is to sell property and distribute the proceeds to creditors. In this process, a trustee sits down with the debtor during a “341 meeting” and asks them questions about their assets and financial affairs. From there, trustees review bankruptcy documents and is entitled to ask questions to find out if any nonexempt property, assets, or items that can be seized by the trustee and sold to satisfy debts.
Chapter 13 Trustees
In a Chapter 13 reorganization, a trustee’s role differs somewhat from a Chapter 7 bankruptcy trustee. A debtor still meets with a trustee in a 341 meeting and is asked about assets and financial affairs, however the trustee cannot take any of their property or assets. Instead, they assess the bankruptcy plan to see if it fits technical requirements and if it seems like it has a reasonable chance of success in repayment. Additionally, many trustees in Chapter 13 offer financial counseling and management. The Chapter 13 Trustee is also in charge of distributing payments from the debtor to qualified creditors. The trustee will sometimes refuse to pay creditors if they cannot prove that debts are owed them.
It is important to to remember a couple things about a bankruptcy trustee in order for a case to run smoothly and carefully. First of all, they aren’t your enemy who is seeking to suck you dry of all of your money and picking through your possessions to sell them off. An fact, most are quite reasonable people who are simply trying to do their job. In relating to a trustee, a debtor first of all needs to be honest. That includes an accurate listing of your assets because inaccurate disclosure can lead to criminal prosecution and a loss of discharge.
Trustees are not the only aspect of a bankruptcy case it is important to be informed about. If you are seriously considering bankruptcy and you live in Utah, you need to consult with an attorney who understands Utah bankruptcy laws. Not all bankruptcy attorneys are the same. While the process appears complicated, a Utah bankruptcy lawyer will be able to help you understand your options and avoid making bad decisions that you could later regret. Lincoln Law specializes in bankruptcies. Every day, they help people get out from under debts from $10,000 to $1,000,000 and higher. So far, they’ve wiped out over 100 million dollars in debt. They even created the software that is now used by other leading bankruptcy law firms throughout the country! You need Lincoln Law. No other law firm is better qualified to bring you the fastest debt relief and do it right the first time.
Author: Carl Gustafson