That Person I Talked To ( The Trustees)

Posted on | June 29, 2010 | 1 Comment

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Just who are the Bankruptcy Trustees?

Regardless of whether you file for Chapter 7 or Chapter 13 bankruptcy, you’ll have a trustee intimately involved in your case. Chapter 7 and Chapter 13 bankruptcy trustees are appointed by United States’ Trustees. While United States’ Trustees are government employees, Chapter 7 and 13 trustees are usually attorneys and accountants. You’d be well advised to realize and remember that the trustee assigned to your case represents your creditors (not you) and is looking out for their best interests.   In short- Trustees, while doing their job, are not your friends.

Trustees appointed to a Chapter 7 bankruptcy case generally have a more limited role than they do in Chapter 13 cases. First, your Chapter 7 trustee will attend creditors’ meetings (the 341) and ensure everything is going smoothly with your case. He or she will also look at your list of assets (if you have any) to determine what assets are exempt from the bankruptcy proceedings.

If you have non-exempt assets, your trustee will oversee the process of selling them and distributing the proceeds equally among your creditors. Trustees in no-asset cases make only $60 for their work, although the National Association of Bankruptcy Trustees is hoping to pass legislation that will increase that fee to $100 in no-asset cases. In asset cases, the trustee earns that fee in addition to a commission from the assets that have been sold.

The bankruptcy trustee in a Chapter 13 case has a bigger role than they do in a Chapter 7 case as the trustee has a dual role with Chapter 13 cases. As previously mentioned, their goal is to represent and look out for the best interest of the creditors (again, not you). However, they are also responsible for reviewing your repayment plan and ensuring you have no difficulties following that plan. You send each month’s payment to the Trustee and they will distribute the funds among your creditors. Unlike with Chapter 7 bankruptcy, you can generally keep your assets in Chapter 13 since you’ll be repaying, in full or in part, your debt.

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One Response to “That Person I Talked To ( The Trustees)”

  1. What Is A 341 Meeting In Bankruptcy? |
    August 1st, 2010 @ 11:50 pm

    […] for the debtor to be in attendance with his or her lawyer. The meeting is presided over by a bankruptcy trustee (there will not be a judge in […]

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