Filing for bankruptcy can be a confusing process—especially when you consider the various parties involved such as the federal bankruptcy court, trustees, credit counselors, and attorneys. This article will provide an overview of the job requirements of a trustee in regards to bankruptcy cases.
The Trustee’s Role
Once you file for bankruptcy, you will be automatically assigned to a court-appointed trustee. This individual is responsible for administering your case, meaning that they will be the one to organize the sale of your non-exempt assets if you choose liquidation bankruptcy, or help determine the monthly payment requirement if you choose a repayment plan instead. In most cases, you will not have direct contact with the trustee themselves unless you are trying to discharge consumer debts without making a genuine effort to repay them, or you have committed a crime such as fraudulently concealing assets.
Duties for Chapter 7 Bankruptcy
When filing for Chapter 7 Bankruptcy, the trustee will review your financial situation and report back to the court as to whether you qualify for relief under the “means test.” The trustee will also set standards for financial record-keeping and monitor attorney fees.
Duties for Chapter 13 Bankruptcy
When filing for Chapter 13 Bankruptcy, the court-appointed trustee is responsible for reviewing and approving the three-to-five year repayment plan structure.
Additional Duties of the Trustee
In addition to the aforementioned duties, trustees will perform a number of other tasks such as protecting and preserving assets of the estate, pursing avoidance actions against creditors who fail to adhere to the guidelines outlined by the Fair Debt Collection Practices Act, and reviewing records for all financial transactions related to the bankruptcy itself.