Bankruptcy trustees can have a big impact on the outcome of a bankruptcy case, and they play an integral role in the bankruptcy process. Most bankruptcy filers have never heard of a bankruptcy trustee prior to beginning the bankruptcy process, and for most, the term is shrouded in mystery. However, there’s no need to feel intimidation at the prospect of wondering, “What is a bankruptcy trustee?” Below we have compiled a short guide outlining all you need to know about bankruptcy trustees.
What Is a Bankruptcy Trustee?
A bankruptcy trustee is an entity, usually an independent contractor, who is appointed to oversee your bankruptcy case. They act as an administrator, reviewing all financial documents and ultimately making a recommendation to the courts as to whether or not your bankruptcy case should be dismissed. Trustees are assigned by the United States Trustee Program, which is under the Department of Justice. Trustees are paid a small fee for each case they take on, but they usually receive a commission on any assets obtained from the debtor. Because chapter 7 bankruptcies are more common than chapter 11 or chapter 13, there are generally more bankruptcy trustees needed for chapter 7 cases.
What Does a Bankruptcy Trustee Do?
It is essential to have a cooperative relationship with your bankruptcy trustee, as they are the administrator of your case, and have the ability to influence its outcome. A trustee reviews your bankruptcy petition and all the submitted paperwork to see that it meets all the requirements of a proper bankruptcy filing. They verify all financial information to prevent fraudulent claims, and also facilitate 341 meetings.
- Chapter 7 Bankruptcy: Your bankruptcy trustee will also collect your non-exempt property, convert your assets to cash, and distribute any proceeds to your creditors for repayment of your debts.
- Chapter 13 Bankruptcy: Your bankruptcy trustee will oversee your repayment plan, making sure that it is reasonable and affordable while collecting your payments and dispersing them to your creditors.
Representing You with Your Bankruptcy Trustee
For many clients facing bankruptcy, they often feel intimidated at the prospect of working with a bankruptcy trustee. It’s important to realize that it’s possible to have a great and cooperative relationship with your trustee that will help facilitate the expedient discharge of your bankruptcy case. At Parker & DuFresne, we specialize in bankruptcy law, and through a thorough consultation, our attorneys will help you determine if bankruptcy is the right solution for you. We pride ourselves on giving our clients the resources and information they need for a successful working relationship with their trustee, and would be happy to provide the legal assistance you need to get on the road to financial stability. Contact our offices today for more information!