Role of Your Bankruptcy Trustee

A bankruptcy trustee is an individual that plays a role in the process of each different type of bankruptcy that is available. If you are considering filing for bankruptcy, you should understand what exactly the bankruptcy trustee will do. Here are the basics of the bankruptcy trustee and what role they play in the process of filing for bankruptcy.

Chapter 7

The bankruptcy trustee plays a big part in a Chapter 7 bankruptcy. When you file for Chapter 7, you will have to work with the trustee to determine what property will be able to be liquidated. You will provide the trustee with a list of all of your property and assets. The trustee will then review all of the information that you have provided them. They will determine what property is exempt from liquidation and what property is not. They will then determine if you have anything of value that would help out your creditors. In this case, the trustee gets paid more if they collect more of your property for the creditors. 

The trustee will also organize a meeting of your creditors. You and a representative from your creditors will meet together at the court. This is sometimes referred to as the trustee meeting. You will sit in a room with the trustee and your creditors while the trustee asks you certain questions. They will try to determine if you are hiding any assets that could be used to repay your creditors.

Once they determine what assets you have, they will then be in charge of liquidating the assets. They will oversee the process of liquidating the assets and making sure that the creditors receive payment.

Chapter 11

If your business is filing for Chapter 11, the trustee will also play an important role in the process. During Chapter 11 proceedings, the trustee will gather all of your creditors together and try to come up with a suitable repayment plan. They will look at your business's assets as well as how much money you bring in. They will then determine how much you should repay each creditor and over what period of time.

Chapter 12 and 13

When filing for Chapter 12 and 13 bankruptcy, the trustee will provide a similar role in the process. These types of bankruptcy are considered a reorganization. This means that you will still be repaying your creditors under an approved repayment plan. The trustee is going to oversee this repayment process and make sure that everything goes according to plan.

Debtor Advocate

Throughout the process of bankruptcy, the trustee is also going to be an advocate for you. They do not just work for the court and for your creditors. The trustee is going to make sure that none of your creditors keep harassing you after the automatic stay has been issued by the court. If they see anything that they do not like from your creditors, they will report it to the prosecutor's office.

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