The trustee in a bankruptcy case plays a critical role in the process. The primary job of a trustee is to collect your non-exempt assets, liquidate them, and pay down the debts of your estate as much as possible.
Understanding the role of a Chapter 7 bankruptcy trustee in Jacksonville can be helpful for anyone considering filing for protection. Before you file your petition, discuss your situation with an experienced attorney for advice on how the process works with a Chapter 7 trustee.
Reviewing Petition and Schedules
The trustee’s job starts with reviewing your documentation, including the petition and its attached schedules and lists. These documents inform the trustee of your assets and liabilities and gives them a first look into your true financial position. The trustee then reviews and verifies the information provided in these documents.
Trustees Oversee the Meeting of Creditors in a Chapter 7 Bankruptcy
In Jacksonville, a trustee also has the role of conducting the Meeting of Creditors, which occurs early in the Chapter 7 bankruptcy process. Despite its name, creditors rarely appear at the meeting. The meeting of creditors, which is also known as the section 341(a) meeting, provides the trustee with the opportunity to meet with you and ask questions about your bankruptcy petition and schedules. A trustee typically uses this meeting as an opportunity to validate the information contained in the filing documents or follow up on any questionable transactions.
Trustees Help Liquidate Assets
Once the trustee evaluates your assets and considers any exemptions, they begin liquidation of non-exempt assets. These include property such as rental or commercial property and personal assets such as motor vehicles or boats. It is actually rare for a trustee to take a debtor’s non-exempt assets, and debtors are given the opportunity to “buy back” those assets over a period of time at no interest. The trustee keeps a percentage of the funds and distributes the remainder to the creditors who file a claim in the bankruptcy case.
In the vast majority of cases, the trustee determines that there are no assets in the estate. In that case, the trustee files a notice that there are no assets to liquidate and no distribution to creditors.
Avoiding Improper Transfers
Sometimes the trustee will take steps to avoid inappropriate transactions, including preferential transactions where a debtor prioritizes one creditor over another before filing for bankruptcy protection. The trustee also investigates potentially fraudulent transactions before or during the bankruptcy process. In either case, the trustee can void the transfer and collect any assets that are improperly distributed.
Objecting to Discharge in Chapter 7 Bankruptcy
For most people, the Chapter 7 process goes smoothly. However, discharge of certain debts can be difficult. If the Chapter 7 trustee believes that you have committed fraud or violated any rules of the bankruptcy court in Jacksonville, they can file a motion to ask the court to refuse any discharge of your debt. Similarly, an individual creditor can object to the dischargeability of their debt, for instance, on the basis of fraud
Talk to an Attorney About a Trustee’s Role in the Jacksonville Chapter 7 Bankruptcy Process
Filing bankruptcy is a complicated process. Working with an experienced attorney will make the Jacksonville Chapter 7 bankruptcy process smoother and the role of a trustee easier to understand. Don’t try to do it yourself—call our attorneys today to learn more.