The Role of the Bankruptcy Trustee
A standing trustee is appointed by the court for each bankruptcy case. The trustee serves as the balancing act between the debtor and all creditors. Mainly he or she represents the interests of the creditors and is present at the first meeting of creditors. However, the interest of the creditors is also an interest in helping you succeed with a successful bankruptcy, whether it involves actions laid out through the court or a three to five year plan.
The trustee plays a limited role in a Chapter 7 bankruptcy. If any assets exist in your case, the trustee will liquidate and distribute them to creditors. To protect the creditors, the trustee can review claims of exemption and has the power to deny a discharge if there is evidence of fraud, perjury or ineligibility.
Chapter 13 requires a larger role for the trustee. He or she collects and liquidates any non-exempt property and can object to exemptions claimed by the debtor, as in a Chapter 7. The major part the trustee will play in a Chapter 13 is overseeing the performance of your three to five year plan, manage your financial affairs, and keep you on track so that creditors will be paid. The trustee is usually in charge of all Chapter 13 cases in one geographic area.
Now that you have a good sense of the process and what is involved, you may be wondering how filing will protect your most important assets and property. I’ll tell you how to save your home in Issue 5 of The Smart Guide to Bankruptcy.
See you then!
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