What is the Bankruptcy Trustee
As bankruptcy attorneys, many of our clients ask us questions about the bankruptcy trustee and the job that they have in managing or participating in their case. The bankruptcy trustee plays an important role in any bankruptcy proceeding. When you file a Chapter 7 bankruptcy, an impartial bankruptcy trustee is required to be appointed. It is the role of this impartial bankruptcy trustee to oversee and administer all aspects of the case. In addition, the bankruptcy trustee has many other responsibilities that come with this appointment. It is important for you, as the person filing a Chapter 7 bankruptcy, to understand the key responsibilities, and the role, of the bankruptcy trustee. As such, here are some of the primary duties that the bankruptcy trustee is required to fulfill. As your bankruptcy attorney, we can go over the each role, and responsibility, and how it affects you in more detail.
Role of The Bankruptcy Trustee
The bankruptcy trustee will review the bankruptcy petition and all the documents that have been filed with the court. When we file your bankruptcy petition, we will file a number of documents disclosing to the court your personal and financial information. The filed bankruptcy papers include all information about any debts that you may have, your income and income sources, the state of your financial affairs, any property that is in your name, and proof of all of these statements. This proof typically includes pay stubs, tax returns, and any relevant information about your assets. When you file for bankruptcy with the court, or we file for you, you will traditionally be required to send all of these documents to the bankruptcy trustee as well. We will send these documents to the bankruptcy trustee, whose job it is to review both your position and also to verify all the information you have provided.
During the next step of the bankruptcy proceeding, the trustee’s duties include examining the bankruptcy filing under oath. What this means is that approximately one month after your case has been filed you will be required to attend a hearing which will be held by the bankruptcy trustee. Your creditors will be invited to attend this meeting so that they can ask you any questions under oath if they believe that you are hiding assets. It is rare for any creditors to attend the 341(a) meetings, however, the trustee’s job is to ask you questions under oath about all of the information that you have submitted in your bankruptcy documents.
When you file a Chapter 7 bankruptcy, the bankruptcy trustee has a responsibility to sell off all of your non-exempt assets. Anytime you file a Chapter 7 bankruptcy the courts allow you to keep a certain amount of property specifically designated by the state in which you file your bankruptcy. These are protected assets and are considered to be exempt from sale in the bankruptcy proceedings. However, if you own any property which is deemed to be above and beyond the amount allowed by the state, the bankruptcy trustee determines the value of the property that you own and makes a decision about any property that needs to be sold in order to pay off your creditors. Very often, we find that there are no non-exempt assets and so the bankruptcy trustee will submit a report stating that there will be no sale of assets, and therefore no distribution to the creditors. If the trustee finds that there are assets which are not exempt assets, he or she will liquidate and sell them in a way that provides a maximum amount of payout to your creditors.
Our job is to protect you during the bankruptcy process and to preserve your assets as much as possible. The trustee’s job is to preserve the assets of the estate for distribution to creditors. As such, it is wise for you to hire an attorney that will be in your corner. To schedule an appointment with our law firm, call today.