What Is a Trustee and What Is His Role in My Bankruptcy?
When you file bankruptcy, the court will appoint a trustee to your case. This is true for both Chapter 7 and Chapter 13 bankruptcies, although the function of the trustee differs significantly. Your Bryan bankruptcy attorney will help you when you deal with the trustee, but it is important to keep in mind that it is in your best interests to maintain a cordial and professional demeanor.
Who Does the Trustee Represent?
While this may seem unfair, the trustee's function does not include looking out for your best interests except to ensure that the process is fair. Indeed, the trustee gains financially in a Chapter 7 by earning a fee and commission for assets of yours that are sold to pay creditors. That said, your trustee must act in accordance with the law, and indeed the United States' Trustee monitors all trustees. If evidence of fraud or abuse emerges, the U.S. Trustee can recommend legal action be taken by the Federal Bureau of Investigation and United States Attorneys.
Chapter 7 Trustees
Your trustee in a Chapter 7 case is selected randomly from a group of lawyers. The main function of this trustee is to determine whether you hold any non-exempt assets, and then sell them to distribute payment among your creditors. He will hold a “341 meeting” at which time your creditors can make statements about your behavior in regard to nonpayment. The main purpose of this meeting is to affirm your financial situation and the assets you possess.
Chapter 13 Trustees
The Chapter 13 bankruptcy trustee will also hold a 341 meeting to determine your financial situation. However, the function of this trustee differs substantially from that assigned to a Chapter 7 case. Because the purpose of a Chapter 13 is reorganization of debt in order to make it easier to pay your creditors, you are not facing the sale of assets to pay off debt. Rather, the trustee conducts an analysis of your case and produces a plan for restructuring repayment. While the Chapter 13 trustee is representing your creditors' interests, he also is charged with the responsibility to develop an arrangement whereby you can make monthly payments without being financially crippled.
Once the arrangement is accepted by the court you will send one payment to the trustee each month. He will distribute this payment to your various creditors in accordance with the plan. Keep in mind that you may not have to repay all of your debt in a Chapter 13 bankruptcy.
For Questions or Assistance with Your Bankruptcy
It is important that you are as accurate as possible in all the materials you submit for your bankruptcy. This can be more difficult than you may imagine, and it is in your best interests to work with a Bryan bankruptcy attorney. Call Peterson Law Group today at 979-703-7014 or 936-337-4681.