Expert Advice When You Need It Most
What is a bankruptcy trustee and what is his/her role in the bankruptcy process?Written by: Jeffrey Daniel Larkin Reputation Level 15
Posted over 2 years ago. 8 helpful votes, 0 comments
1
Chapter 7 TrusteeGenerally speaking, the role of the Trustee in a Chapter 7 case is to review the bankruptcy schedules to determine whether there is any property available to be liquidated for the benefit of creditors. If there is property available, the Trustee’s job is to quickly and efficiently liquidate the property to create a pool of income for creditors. Once there are assets to liquidate, a notice is sent to all creditors advising them that there will likely be a pro-rata distribution in the case. Creditors are given a certain amount of time to file a “proof of claim” form in which they attach evidence of the debt they are owed. Provided the creditor timely and correctly files the proof of claim, they will be entitled to share in the distribution of money that the liquidated asset generates. If a creditor fails to timely file a proof of claim, they do not get paid in the bankruptcy case and the debt is still eliminated. 2
Chapter 13 TrusteeFor the most part, the role of a Chapter 13 Trustee is different from a Chapter 7 Trustee. While the Chapter 7 Trustee looks for assets to liquidate, it is the rare exception when property is taken and sold in a Chapter 13 proceeding. In Chapter 13, a repayment plan is proposed to repay a certain percentage of the debt owed to creditors. Once approved, the Chapter 13 Trustee’s function is to administer the plan according to its terms. There is a distribution scheme the Trustee follows, and debts such as recent taxes and back child support are given priority over general unsecured creditors like credit cards and medical bills. In Chapter 7, once all non-exempt assets have been liquidated and the money has been paid out, the Trustee’s job is complete and the case is closed. Under Chapter 13, the Trustee’s job is complete once all plan payments have been made and the Trustee has administered all of the funds to creditors according to the plans terms. Additional ResourcesRelated Questions3 Attorney answers: 
Asked by a user in North Myrtle Beach, SC - 2 months ago. 4 Attorney answers:
Asked by a user in Orange, CA - 6 months ago. 1 Attorney answers: 
Asked by a user in Longwood, FL - almost 2 years ago. Find Franchising LawyersRelated Searches |