Those thinking about filing for bankruptcy understandably have many questions about the process. These inquiries can range from how exactly their debts will be affected to questions about the procedure and players involved in their bankruptcy case. One person who plays a large part in bankruptcy proceedings, and of whom many petitioners are not aware, is the trustee appointed to the case.
Bankruptcy Trustee A trustee is appointed in every Chapter 7 or Chapter 13 bankruptcy case. The trustee is responsible for overseeing the debtor’s bankruptcy petition. In general, the trustee is charged with representing the interests of the creditors named in the petition, but is also supposed to remain impartial to a certain extent. The role of a trustee includes evaluating the debtor’s bankruptcy petition to ensure the information contained within it is accurate and truthful and that the debtor thoroughly reviewed all the relevant information with his or her attorney. This likely involves the debtor verifying certain facts under oath in the presence of the trustee. The trustee is assigned to compensate the debtor’s creditors as fully as possible in the context of the bankruptcy case. The trustee’s role and specific duties vary slightly depending on whether the bankruptcy case filed is a Chapter 7 or a Chapter 13. Trustee in a Chapter 7 Bankruptcy In addition to the above responsibilities, a trustee who is appointed to a Chapter 7 bankruptcy case may also be charged with the following duties:
- Selling the debtor’s assets not listed as exempt in the bankruptcy petition;
- Evaluating the debtor’s property in order to determine if any nonexempt assets exist which would be eligible to be sold to pay creditors;
- Making sure the debtor did not improperly transfer any property to a third party before filing the bankruptcy petition, and voiding such a transfer if it did occur, in order to distribute the proceeds accordingly among all creditors; and
- Making sure the debtor did not make any disproportionate payments to preferred creditors, and voiding any such payments that did occur, in order to distribute the money evenly among all creditors.
Trustee in a Chapter 13 Bankruptcy A trustee assigned to a Chapter 13 case maintains the general duties outlined above, and is also responsible for the following:
- Reviewing the debtor’s proposed repayment plan to ensure it is fair to the creditors named in the petition;
- Attending the meetings of creditors, where he or she will ask the debtor questions under oath about the information contained in the bankruptcy petition;
- Accepting payments from the debtor in accordance with the approved repayment plan, and transferring the appropriate funds to creditors;
- Evaluating any proof of claim documents filed by creditors, and objecting to claims that are not timely or otherwise properly filed by creditors.
Bankruptcy Attorney If you or someone you know is considering filing for bankruptcy, it is highly advisable to consult with an experienced bankruptcy attorney about your case, as matters can quickly become complex and confusing. Contact the lawyers at Hoffman, Larin & Agnetti, P.A. today to schedule a consultation to discuss your case. Our offices are located in Miami, Fort Lauderdale, Islamorada, and Key West.