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Some more bankruptcy education:Who is a bankruptcy trustee in a Chapter 7 or Chapter 13 bankruptcy

Some more bankruptcy education:


Who is the bankruptcy trustee in a Chapter 7 or Chapter 13 bankruptcy? What do they do?


In every case under chapter 7 or chapter 13 of the Code, a person called the trustee is appointed by the bankruptcy court. The trustee’s job is to represent the interests of the unsecured creditors. That means that all the creditors who lent money to the debtor but did not get security, a mortgage, a car note, etc., but rather only got a promise to repay, are represented by this one person, the trustee. So not every creditor needs to get a lawyer.

The trustee’s job is pretty straightforward in theory, and the bankruptcy laws lay it out.. It includes collecting property of the estate from whoever has it (remember what the estate is, we covers it in an earlier installment of this series), objecting (if appropriate) to an exemption of some of debtors assets if needed, objecting to debtor's discharge if needed discharge, selling estate property and distributing the money to creditors with valid claims, and making a final accounting to the court and to the United States trustee of where all the money from those sales went.

In a chapter 7 consumer case, most times there is no nonexempt property (the debtor keeps all of his stuff, as none of it belongs to the estate- we will discuss exemptions in a later installment, for now just understand that its property of the debtor that is not part of the estate for whatever reason- so the trustee’s job is limited. In that case, the trustee evaluates the debtor’s schedules, statements, and exemption claims, and makes sure that the debtor carries out the stated intentions in the petition. The trustee presides at the meeting of creditors, reviewing documents that the debtor is required to provide. The trustee also may make inquiries of the debtor to determine whether to file objections to discharge or whether the filing of the case is in bad faith and should be thrown out.

The chapter 13 trustee has more to do than a Chapter 7 trustee. The Chapter 13 trustee does everything a Chapter 7 trustee does, and monitors the debtor’s compliance with the plan (the Chapter 13 repayment plan) and its terms.Chapter 13 trustees also perform certain tasks at the conclusion of the case, such as the filing of a final report and account of all plan payments and a notice of final cure of any home mortgage claims.

But the bankruptcy trustee is not a judge. A trustee does not have the power to resolve disputed issues in a bankruptcy proceeding. The trustee is a party with equal status to everyone else, debtors and creditors, interested in the outcome of the case. If there is a disputed issue, the trustee can file papers to get it decided by the bankruptcy judge, but the trustee cannot decide anything.

Depending on the facts of a particular case, the trustee can be either a friend or enemy of the debtor. Knowing which, and knowing who has the authority and interest to do what in a given bankruptcy case is very important in the debtors successful resolution of the matter.



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We get quoted on bankrate.com

Its also a pretty useful article, so worth the time to read it if you want to know how many times, or when, you can file bankruptcy. https://www.bankrate.com/finance/debt/chapter-13-an-option-even-aft

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