What Is the Function of the Bankruptcy Trustee in a Chapter 7 or Chapter 13 Petition?
When you have decided to seek protection from creditors in bankruptcy, whether you’re hoping to permanently discharge debts under Chapter 7 or make new payment arrangements through Chapter 13, you’ll be working with a bankruptcy trustee at some point. What is a bankruptcy trustee? What are the responsibilities of the trustee?
What Is a Bankruptcy Trustee?
A bankruptcy trustee is a federal employee, appointed by the Department of Justice to protect a debtor’s estate throughout the bankruptcy process. The trustee does not represent the debtor and is not charged with advocating for the debtor in conflicts with creditors. Instead, the trustee works on behalf of the bankruptcy court to facilitate the bankruptcy process. The trustee cannot take any legal action without the express approval of the bankruptcy court.
What Are the Duties of a Bankruptcy Trustee in Chapter 7 and Chapter 13 Filings?
When you file for protection under Chapter 7, you agree to relinquish non-exempt assets in exchange for the permanent discharge of certain debts. Those assets you give up are transferred to the bankruptcy trustee. If those assets need to be valuated or sold, the trustee will take the necessary steps to get that done. The trustee will also oversee the distribution of any property or proceeds to creditors.
With a Chapter 13, you agree to restructure your debt, coming to new payment arrangements with your creditors. Typically, a Chapter 13 bankruptcy is completed over a three-to-five-year period. During that time, you’ll make payments to the trustee, who will then distribute the proceeds to your creditors. The trustee may also request payment increases, if necessary.
Contact Attorney Howard N. Sobel
At the office of Howard N. Sobel, we provide personal bankruptcy counsel to men and women throughout the state of New Jersey. Contact our office online or call us at 856-424-6400 to set up a free initial consultation. Evening and weekend appointments can be arranged upon request. We accept all major credit cards.
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