If you have been reading about bankruptcy on the Pew Law Center websites, then you have probably noted our occasional references to the “bankruptcy trustee.” The trustee has a significant role in every bankruptcy case, whether it be Chapter 7, Chapter 11, or Chapter 13. Lawrence ‘D’ Pew, wants you to understand how the bankruptcy trustee will be involved in your case.
Your attorney at the Pew Law Center will carefully describe the procedures that take place once you have filed for protection under the U.S. Bankruptcy Code. When a bankruptcy petition is filed, a trustee is immediately assigned to the case. This impartial trustee is charged with the administration of the case, and is responsible for protecting the creditors’ interests in the bankruptcy estate. If there are assets, the trustee is required to pay shares to those creditors entitled to a distribution. For most debtors, the bankruptcy trustee is the sole individual responsible for administering the estate and managing the process all of the way through to discharge.
As your Arizona bankruptcy attorneys will tell you, do not underestimate the trustee’s experience or authority, which are considerable. If you claimed exempt property in your petition, for example, but you undervalued the property to stay within the exemption limit, the trustee may object to your exemption claim. If you have non-exempt property that can be liquidated, the trustee will make arrangements with you to collect the property. And if you attempt to secret property or otherwise defraud your creditors, then the trustee can ask the court to dismiss your case altogether. Working with the bankruptcy trustee is an integral part of the bankruptcy process. As your attorney will discuss with you during your initial consultation, you are expected to cooperate fully with the trustee in the administration of your bankruptcy case.
Bankruptcy and the Chapter 7 Trustee
The Chapter 7 Liquidation debtor will meet the case trustee face-to-face at the §341 First Meeting of Creditors. The trustee is the go-to person responsible for collecting and liquidating (selling) the debtor’s non-exempt assets. The trustee then distributes the proceeds of the sale to the qualified creditors who filed proofs of claims against the bankruptcy estate.
When the debtor’s assets are properly exempted, meaning the exempt assets are fully protected from liquidation in bankruptcy, then the trustee declares the Chapter 7 bankruptcy a no asset case. With a no asset case, there are no non-exempt assets available for liquidation in the bankruptcy estate. Chapter 7 no asset cases are common, as Lawrence ‘D’ Pew, Arizona Attorney (bankruptcy), will tell you.
Bankruptcy and the Chapter 13 Trustee
When the debtor files a Chapter 13 Individual Debt Adjustment, the assigned trustee reviews the proposed plan and, once the court has approved the plan, manages it for the next three to five years. The Chapter 13 debtor makes his or her plan payments to the trustee. The trustee then distributes the money to those creditors that were included in the plan. The Chapter 13 trustee is directly involved in administering the bankruptcy process until the plan is complete and the discharge is ordered by the court.
Lastly, your attorney (bankruptcy) will explain the importance of the U.S. Trustee in overseeing all bankruptcy case trustees. That is, the watchdog over the entire bankruptcy process everywhere in the country is the U.S. Trustee. The U.S. Trustee is responsible for appointing the case trustees and monitoring their activities. When bankruptcy fraud is suspected, the U.S. Trustee will seek the assistance of the U.S. Attorney and the FBI to pursue appropriate action in the alleged fraud and bankruptcy abuse matter.
Schedule a FREE VIP Bankruptcy Consultation with Our Attorneys
Bankruptcy laws are very complex and the process is overwhelmingly confusing for many who seek debt relief on their own. To learn how we can help you file for federal bankruptcy, contact the Pew Law Center today. We will schedule a FREE Bankruptcy Consultation for you with an experienced Arizona attorney (bankruptcy). Call 480-745-1770 right now to speak with a friendly member of our legal team. Remember, at the Pew Law Center there is no shame or blame.