What are the Functions of a Bankruptcy Trustee?
Filing for consumer bankruptcy is an extremely complicated process. Whether you are simply considering bankruptcy as one of your options or have begun to look more carefully into actually filing soon, it is important to learn more about the bankruptcy trustee. In researching Chapter 7 bankruptcy or Chapter 13 bankruptcy, you have likely come across information about the bankruptcy trustee and that person’s role in the process. However, it can be confusing to understand precisely what the trustee does, and what the debtor’s relationship to the trustee will be. The U.S. Department of Justice gives answers to frequently asked questions about the bankruptcy trustee, and we want to provide you with some of that information.
Who or What is a Bankruptcy Trustee?
First, there is an office of the U.S. Trustee, which is within the U.S. Department of Justice. One of the primary roles of this office is to appoint bankruptcy trustees in Chapter 7 and Chapter 13 bankruptcy cases, as well as to handle other matters in business bankruptcy cases. This office monitors bankruptcy cases and their administration across the country, and it also identifies potential bankruptcy fraud concerns. The office of the U.S. Trustee is not affiliated with a bankruptcy court that will hear a debtor’s case. Instead, it is only connected to the trustee who is affiliated with the case.
Now, as we said, the office of the U.S. Trustee appoints the trustee in a bankruptcy case. The trustee is a person who is tasked with various roles in consumer bankruptcy cases depending upon the type of bankruptcy.
Understanding the Functions of the Bankruptcy Trustee
One of the first tasks of the bankruptcy trustee is to examine the debtor’s bankruptcy petition and to verify any information that the debtor has provided. In addition, in both Chapter 7 and Chapter 13 cases, the trustee will conduct the 341 meeting of creditors. This is a required meeting in which creditors can question the debtor, and the trustee can also ask questions or seek clarifications.
Then, the trustee’s role starts to vary depending upon whether a person is filing for Chapter 7 or Chapter 13 bankruptcy. In a Chapter 7 bankruptcy case—a liquidation bankruptcy—the trustee is required to administer the case. This involves obtaining the debtor’s non-exempt assets and liquidating them. In a Chapter 13 bankruptcy case, the trustee plays a different role. Since Chapter 13 bankruptcy is a type of reorganization bankruptcy in which the debtor develops a plan to repay creditors over a number of years, the trustee does not collect or liquidate non-exempt property. Instead, the trustee examines the debtor’s proposed repayment plan to determine whether it is likely to succeed. In addition, the trustee will typically collect the debtor’s payments under the terms of the repayment plan and distribute them to the creditors.
Contact a Bankruptcy Lawyer in Oak Park
There are many complicated aspects of a consumer bankruptcy case, including the role that the trustee plays. If you have questions or concerns about personal bankruptcy in Illinois, an Oak Park bankruptcy lawyer can speak with you today. Contact the Emerson Law Firm to learn more about how we can assist you.
See Related Blog Posts:
New Report Addresses Trends in Consumer Bankruptcy
Can I Keep My Car if I File for Consumer Bankruptcy?
Who or What is a Bankruptcy Trustee?
First, there is an office of the U.S. Trustee, which is within the U.S. Department of Justice. One of the primary roles of this office is to appoint bankruptcy trustees in Chapter 7 and Chapter 13 bankruptcy cases, as well as to handle other matters in business bankruptcy cases. This office monitors bankruptcy cases and their administration across the country, and it also identifies potential bankruptcy fraud concerns. The office of the U.S. Trustee is not affiliated with a bankruptcy court that will hear a debtor’s case. Instead, it is only connected to the trustee who is affiliated with the case.
Now, as we said, the office of the U.S. Trustee appoints the trustee in a bankruptcy case. The trustee is a person who is tasked with various roles in consumer bankruptcy cases depending upon the type of bankruptcy.
Understanding the Functions of the Bankruptcy Trustee
One of the first tasks of the bankruptcy trustee is to examine the debtor’s bankruptcy petition and to verify any information that the debtor has provided. In addition, in both Chapter 7 and Chapter 13 cases, the trustee will conduct the 341 meeting of creditors. This is a required meeting in which creditors can question the debtor, and the trustee can also ask questions or seek clarifications.
Then, the trustee’s role starts to vary depending upon whether a person is filing for Chapter 7 or Chapter 13 bankruptcy. In a Chapter 7 bankruptcy case—a liquidation bankruptcy—the trustee is required to administer the case. This involves obtaining the debtor’s non-exempt assets and liquidating them. In a Chapter 13 bankruptcy case, the trustee plays a different role. Since Chapter 13 bankruptcy is a type of reorganization bankruptcy in which the debtor develops a plan to repay creditors over a number of years, the trustee does not collect or liquidate non-exempt property. Instead, the trustee examines the debtor’s proposed repayment plan to determine whether it is likely to succeed. In addition, the trustee will typically collect the debtor’s payments under the terms of the repayment plan and distribute them to the creditors.
Contact a Bankruptcy Lawyer in Oak Park
There are many complicated aspects of a consumer bankruptcy case, including the role that the trustee plays. If you have questions or concerns about personal bankruptcy in Illinois, an Oak Park bankruptcy lawyer can speak with you today. Contact the Emerson Law Firm to learn more about how we can assist you.
See Related Blog Posts:
New Report Addresses Trends in Consumer Bankruptcy
Can I Keep My Car if I File for Consumer Bankruptcy?
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