Role of the Bankruptcy Trustee in Your Chapter 7 or Chapter 13 Bankruptcy
After you file your bankruptcy petition, the bankruptcy court will assign a bankruptcy trustee to oversee your case. The bankruptcy trustee represents your creditors. The trustee's main job is to make sure your unsecured creditors are paid the maximum amount allowed by law. How the trustee does this depends on whether you are filing under Chapter 7 or Chapter 13.
Chapter 7 Bankruptcy Trustee
The Chapter 7 trustee gathers any assets you own that are properly part of the bankruptcy estate. The trustee liquidates your nonexempt assets and uses the proceeds to pay your unsecured creditors. The trustee will sell any non-exempt property you own that is free of liens or worth more than the lien attached to it. The trustee will also sell any property that is worth more than any exemption you have in it. In addition, the trustee has the power to recover for the benefit of your creditors certain monies or property that you transferred to others before you filed for bankruptcy. These transfers include preferential transfers (payments that favored one creditor over the others) and fraudulent transfers (improper attempts by a debtor to hide assets from creditors).
Your Chapter 7 bankruptcy lawyer will protect as much of your property as possible from liquidation by using exemptions. In fact, in most Chapter 7 bankruptcies, all of the debtor's property is protected by exemptions so the trustee is unable to seize and liquidate any of it. Many of the exemption rules about what property you can keep and what property must be turned over to the trustee are complex. A College Station Chapter 7 bankruptcy lawyer can make sure that the exemptions are applied to your property to give you the maximum protection permitted by law.
Chapter 13 Bankruptcy Trustee
In a Chapter 13 case, you do not turn over your property to the trustee. You get to keep all your property unless the court orders otherwise. The trustee's job is to review your bankruptcy papers and proposed repayment plan to make sure your calculations are accurate, your expenses reasonable, and your plan fair and in compliance with the Bankruptcy Code. The trustee may request changes in your plan, such as an increase plan payments. If you and the trustee do not agree, the bankruptcy judge will make the final decision on what the terms of your plan should be.
Once the court approves your plan, the Chapter 13 trustee will administer it. You will make your monthly plan payment to your Chapter 13 bankruptcy trustee. The bankruptcy trustee will then disburse the monthly payment to each of your creditors. If you fail to make a payment in full, or you make a payment late, it is the bankruptcy trustee's job to notify the court, which could affect whether you are able to complete your Chapter 13 bankruptcy case.
To learn more about how bankruptcy works and whether it is an appropriate solution to your financial problems, contact the College Station bankruptcy lawyers at the Peterson Law Group. Our experienced Chapter 13 and Chapter 7 bankruptcy lawyers are available to assist you. To arrange for your initial consultation, call 979-703-7014.