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Who Is the Trustee in Bankruptcy?

Who Is the Trustee in Bankruptcy?
"""When you petition for bankruptcy, the Office of the United States Trustee appoints a trustee to administer your case. In the absence of an unusual conflict of interest between the debtor and the trustee or a request by creditors to remove the trustee, this individual will continue to serve as your trustee throughout the duration of your case.

While the trustee has certain powers, it does not have the legal authority to """"compel"""" a debtor to do anything. If there is ever an unresolvable dispute between the debtor and the trustee, the two parties can always bring the matter before the allotted judge, who will serve as the arbitrator.

While in many bankruptcies the debtor never meets his or her allotted judge, the debtor will always meet the trustee. The debtor is required to appear before the trustee for a meeting of creditors, also known as a debtor's exam or 341 hearing. During this proceeding, the trustee will administer an oath to the debtor and ask him or her several questions regarding the filed petition.

In a chapter 7 case, the trustee plays a very different function than in a chapter 13 case. In a chapter 7 case, the trustee seeks to determine whether the debtor has non-exempt assets, i.e., whether the debtor has more assets than he or she is permitted to exempt. In such a case, the trustee will liquidate the asset and pay creditors who have filed a """"proof of claim"""" with the court. The trustee will receive a commission for this liquidation, and the debtor may also receive a sum of money from the sale. It is essential to note, however, that the vast majority of chapter 7 debtors have no assets to liquidate and are therefore considered ""no asset"" cases.

The administrator does not liquidate assets in a chapter 13 case. In fact, many debtors elect chapter 13 as an alternative to chapter 7 so that none of their assets are liquidated. In chapter 13, the debtor makes monthly payments to the chapter 13 trustee for 36 to 60 months, and the trustee then distributes the funds to the debtor's creditors who have filed a """"proof of claim."""" For making distributions, the trustee receives a commission not exceeding 10 percent.

Due to the fact that chapter 13 entails a payment plan while chapter 7 does not, confirmation of the plan is required in chapter 13. One of the trustee's responsibilities is to ensure that creditors are treated equitably and that the debtor contributes all of his/her disposable income to the plan; consequently, the trustee will frequently object to confirmation. The parties will then endeavor to resolve any controversies so that the trustee will approve the plan.

Although the trustee appears to be the debtor's adversary, the trustee is neither for nor against the debtor. As long as the debtor is forthright and comprehensive in describing his/her financial situation to the trustee, the trustee's actions in the case are typically quite predictable.

" - https://www.affordablecebu.com/
 

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"Who Is the Trustee in Bankruptcy?" was written by Mary under the Finance / Wealth category. It has been read 162 times and generated 1 comments. The article was created on and updated on 03 June 2023.
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