Hi all! Since I have talked so much about Ch. 7 Bankruptcy, I wanted to shed some light on exactly what a trustee is, and their role in your claim. Hope you find this helpful!
What is the role of a trustee? According to the Department of Justice, “The chapter 7 trustee collects assets of the debtor that are not exempt under the Bankruptcy Code, liquidates the assets, and distributes the proceeds to creditors.” The United States Courts define the role as, “to liquidate the debtor's nonexempt assets in a manner that maximizes the return to the debtor's unsecured creditors.”
Chapter 7 trustees, while not government employees, are appointed by the United States Trustee and assigned to a panel. Once on the panel, they are usually assigned to Ch. 7 cases through a blind rotation process.
What else does the trustee do? After a bankruptcy petition is filed, usually 21-40 days after, the appointed trustee will then meet with the creditors to figure out how to distribute the liquidated assets. Also at this meeting, the trustee will usually ask questions of the debtor and creditors discussing the debtors’ financial affairs, debts, and property.
It is also the trustee’s role to inform a debtor of any and all potential consequences of seeking a discharge via bankruptcy. (ie. Effects on credit scores, filing other bankruptcy petitions, and risks and benefits involved.)
As you can see, a trustee plays an important role when you are dealing with Ch. 7 Bankruptcy. Should you have any more questions, confusion, or concerns, please do not hesitate to contact our office!
**This blog is informational only and in no way constitutes legal advice of any form. If you have any questions regarding Chapter 7 Bankruptcy, please contact our office.
Sources:
https://www.justice.gov/ust/private-trustee-information#:~:text=The%20chapter%207%20trustee%20collects,distributes%20the%20proceeds%20to%20creditors.
https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-7-bankruptcy-basics
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