What is a Bankruptcy Trustee?
In each consumer bankruptcy case there will be an impartial bankruptcy trustee assigned to manage the case. In Chapter 7 bankruptcy, also known as “liquidation,” the trustee collects the debtor’s non-exempt property, manages the funds from the sale of that property, and coordinates the paying of expenses and distributes the balance to creditors. This trustee is not an employee of the government and may be privately appointed by the creditors but is subject to oversight by United States Trustees. In Chapter 13 bankruptcy, commonly called “reorganization,” there will be a bankruptcy trustee who will typically coordinate the debtor’s monthly payment as they work toward repayment of their reorganized debt. In both cases the trustee assures both the debtor and the creditors’ interests are protected.
With the help of experienced bankruptcy attorneys, your interaction and correspondence with bankruptcy trustees will be facilitated smoothly and without unnecessary complications. Because each case is different, the particulars of your bankruptcy case and your interaction with the trustee will vary depending on your situation. With Weintraub & Selth on your side, you will have highly experienced attorneys working with you and preparing you for interactions with the trustee in your case.
What a Bankruptcy Trustee Does
While the responsibilities of the trustee may vary depending on circumstances, some of the Chapter 7 bankruptcy trustee responsibilities typically include:
- Identify the debtor’s property and assets that may be sold to repay creditors
- Facilitate the selling of the debtor’s property
- Challenge creditors’ claims if they violate the debtor’s rights
- Distribute proceeds from asset sales to creditors
The above represent only some of the responsibilities that the Chapter 7 bankruptcy trustee may have. In Chapter 13 bankruptcy, the trustee assures that debtor and creditors’ interests are fairly represented but the Chapter 13 trustee’s responsibilities also differ from the Chapter 7 trustees in large part because there is no liquidation process. Chapter 13 trustees:
- Review the debtor’s repayment plan and make objections if appropriate
- Oversee and coordinate the “meeting of creditors”
- Receive and distribute funds from debtor to repay creditors as outlined in the repayment plan
For a more detailed explanation of the trustee’s role in your bankruptcy, contact Weintraub & Selth. Over the last several decades we have been representing clients through the bankruptcy process and we are prepared to answer any questions you may have about the trustee’s role in your bankruptcy.