What Is a Bankruptcy Trustee?
In each consumer bankruptcy case, there will be an impartial bankruptcy trustee assigned to manage the case. During both Chapter 7 and Chapter 13 cases, the trustee is responsible for collecting and coordinating the debts to repay creditors. The trustee is there to ensure that both the debtor and the creditors’ interests are protected.
With the help of experienced bankruptcy attorneys in Los Angeles, 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, APC, on your side, you will have highly experienced lawyers working with you and preparing you for interactions with the trustee in your case.
Who Appoints the Bankruptcy Trustee?
Chapter 7, Chapter 11, and Chapter 13 bankruptcy trustees are appointed by the United States Trustee, an officer of the U.S. Department of Justice. This trustee is not an employee of the government. In some cases, they may even be privately appointed by the creditors but is subject to oversight by United States Trustees.
Who Pays the Bankruptcy Trustee?
In a Chapter 7 case, the trustee is paid through a percentage of the liquidation proceeds used to repay your creditors. Typically, this fee can range from 3% to 25%. If there are no assets that are being sold, then the trustee does not make any money.
In a Chapter 13 case, the trustee fee is included in the monthly repayment plan, which cannot exceed 5% of the total payment amount.
What Are the Duties of a Bankruptcy Trustee?
A bankruptcy trustee primarily acts as a representative of the creditors. The trustees are held accountable for making sure the process is run smoothly, from approval of the bankruptcy plan to the creditors’ meeting.
The specific responsibilities of the trustee vary depending on which kind of bankruptcy is filed. Generally, however, the trustee may:
- Collect the debtor’s assets or property
- Liquidate nonexempt property
- Investigate the financial affairs of a debtor
- Approve repayment plans
- Approve lien stripping or loan cram-downs
- Raise objection to the discharge of debt or exemptions claimed by the debtor
- Distribute proceeds of the estate to creditors, according to the creditors’ priority
Because we have such strong relationships with bankruptcy trustees, we know what to expect when working with them and how to provide them with the information they need to perform their responsibilities. This often makes the bankruptcy process as efficacious as possible when working with our bankruptcy attorneys.
Trustee's Role in Chapter 7 & 13 Bankruptcies
The responsibilities of a trustee vary depending on whether the case is a Chapter 7 or Chapter 13.
Chapter 7 bankruptcy trustee responsibilities typically include:
- Identifying the debtor’s property and assets that may be sold to repay creditors
- Facilitating the sale of the debtor’s property
- Challenging creditors’ claims if they violate the debtor’s rights
- Distributing proceeds from asset sales to creditors
- Objecting to a discharge if necessary
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 are responsible for:
- Reviewing the debtor’s repayment plan and make objections if appropriate
- Overseeing and coordinating the “meeting of creditors”
- Receiving and distributing funds from the debtor to repay creditors as outlined in the repayment plan
- Making objections to a repayment plan if necessary
For a more detailed explanation of the trustee’s role in your bankruptcy, contact Weintraub & Selth, APC. 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.
Benefit from Our Strong Relationships with Trustees
Our familiarity with the role of the trustee and their responsibilities allows our bankruptcy attorneys to provide them with information and documentation in a timely manner and allows us to anticipate their actions throughout the bankruptcy process.
Our lawyers have been representing people with serious financial challenges in Los Angeles for several decades. We have represented thousands of individuals and businesses through the bankruptcy process, and we can clearly explain what to expect if you are considering personal bankruptcy.
We have strong relationships with bankruptcy trustees, and we are highly respected for being well-prepared, detail-oriented, thorough, and professional. These attributes help us make the bankruptcy process as smooth as possible for our clients. In this way, our clients can avoid litigation and save considerable time and money.
Professional & Thorough Guidance for Your Case
We are committed to maintaining our well-deserved reputation for preparedness and professionalism throughout the bankruptcy process. Our goal is to ensure this reputation by providing excellent representation to our clients now and in the future.
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