The Role a Trustee in Bankruptcy Plays

In these hard economic times more and more people are finding it necessary to file for bankruptcy. When a person files for bankruptcy, the United States Department of Justice appoints a person known as a Trustee in Bankruptcy. This person is responsible for ensuring that both the debtor’s and the creditor’s interests are maintained in accordance to the law. This trustee may also act as a negotiator between the debtor and the creditor.

The primary duty of the Trustee in Bankruptcy is the bankruptcy estate. This is the property and related property rights of the person who is actually filing the bankruptcy. They are responsible for converting any property that is not exempt into cash. Basically, the trustee gathers and accounts for all of the filers’ assets that are available in order to fairly settle the debtor’s debts to collectors.

Before the Trustee in Bankruptcy can sell any of the filers’ property; he or she must give the filer advance notice of the sale. This will allow the filer the chance to object to the sale of the property. The sale of the property is normally conducted through private sales or public auctions. At this point, the trustee must hold onto all proceeds from the sale until it is determined how these funds should be dispersed fairly.

There are two different types of bankruptcy cases that an individual will file. These are Chapter 7 and Chapter 13 bankruptcies.

Chapter 7 bankruptcies are normally no asset cases. That means that the filer does not have any property that can be sold to settle any of their debts. In this type of bankruptcy, the Trustee in Bankruptcy meets with the creditors, looks into the debtor’s property holdings, and makes certain the proper proceedings are followed. Finally, the trustee reports to the court that the filer has no assets and the case is then discharged.

Chapter 13 bankruptcies are sometimes thought of as a repayment plan. In these cases the Trustee in Bankruptcy will appear at the hearing, advise the debtor on how to reorganize their debts, provide assistance to the debtor on how to follow the repayment plan and helping the debtor get a fresh start.

Unfortunately the need to file for bankruptcy is a growing problem for many Americans and it is important to know that if you have to file bankruptcy, not to get confused about the role of the Trustee in Bankruptcy. The trustee is there to protect the interests of the creditor not the debtor.

Trustee in Bankruptcy Collingwood

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