The Role Of A Bankruptcy Trustee

Whether you about to file for Chapter 7 or Chapter 13 bankruptcy, the court will appoint a “bankruptcy trustee” to oversee the administration of the case. The duties and responsibilities of the trustee depend on the type of bankruptcy that is filed.

But first, it is important to understand what a “bankruptcy estate” is before knowing the role of a trustee. According to bankruptcy law, a bankruptcy estate – which is composed of the debtor’s property (e.g., home(s), vehicle(s), and other assets) – is created and the trustee will then oversee the estate.

The Role Of The Trustee In Chapter 7 Bankruptcy

Chapter 7 is also known as a “liquidation” bankruptcy because the trustee cancels either all or many of your debts and sells some of your nonexempt property to repay your creditors. The trustee will earn a small fee for reviewing your paperwork and a small percentage of any property sold.

The following are some of the main responsibilities of a trustee in a Chapter 7 bankruptcy:

• Examine the bankruptcy petition and verify the calculations and personal information using your financial documents and other sources
• Conduct the 341 meeting and ask you questions about the information in your bankruptcy petition under oath
• Sell nonexempt property
• Distribute proceeds from sold assets to creditors
• Challenge the claims of creditors, if necessary

The Role Of A Trustee In Chapter 13

In contrast, Chapter 13 bankruptcy reorganizes your debt in the form of a three- to five-year repayment plan, which allows you to pay creditors some or all of what you owe and retain possession of your property. The trustee will oversee how your plan is administered.

The main duties of a trustee in a Chapter 13 bankruptcy include:

• Review your proposed repayment plan and verify your information based on your documents
• Make objections to the plan, if necessary
• Conduct the Chapter 13 meeting of creditors and ask you questions under oath
• Attend the confirmation hearing and inform the judge if he/she approves of your plan
• Collect/receive payments from you, according to your repayment plan
• Distribute payment to creditors

If you are interested in filing for bankruptcy in Northbrook, IL, contact Bach Law Offices, Inc. today at (847) 440-5998 for a free initial consultation. Let us help you overcome your debt and get your life back on track!