The Roles of a Bankruptcy Trustee
The bankruptcy process can seem complicated to anyone filing. Many people do not understand the process and with all the false information around, it can be hard to distinguish fact from fiction. This can discourage most people from filing for bankruptcy or seeking a professional bankruptcy lawyer in San Diego. In an attempt to shed light on the process, this article will discuss the role of a bankruptcy trustee.
Who is a Bankruptcy Trustee?
A bankruptcy trustee is a person appointed to every consumer bankruptcy case. They are tasked with various duties and are meant to be an intermediary between the debtors, the court and the creditors. The trustee is appointed by a regional US Trustee office. They are often bankruptcy lawyers or at least experienced in finance and business. This is important in order to ensure that they understand and can perform these duties. In return, the trustee is rewarded with a percentage of the filing fee if the case does not involve any assets. In case there are assets to collect, the trustee gets a percent of the liquidated assets.
The Bankruptcy Estate
To understand the roles of a trustee, you must understand the concept of bankruptcy estate. The bankruptcy estate is comprised of a debtor’s property and is considered a separate legal entity, not linked to the bankruptcy debtor. Naturally, because the estate is not a living being, a trustee is appointed to oversee and act on behalf of the estate, performing and overseeing various legal obligations.
The Duties of a Trustee
Their main duty is to administer the bankruptcy estate. The trustee determines which assets are valuable to the estate and collects property form the debtor or someone currently holding it. Afterwards they convert property into money by the means of selling it. They are held accountable for the estate property.
With Chapter 7 bankruptcy, the trustee gathers the property for sale. They need to collect as many assets and liquidate them to pay for the claims. They are also tasked with validating unreliable claims and distributing money collected from the person filing for bankruptcy. With Chapter 13 bankruptcy their role changes a bit. Instead of gathering and liquidating assets, they are tasked with creating and revising the proposed repayment plan for the debtor. The trustee is charged with distributing money from the repayment plan and making sure the plan is dependable.
Looking for an Affordable and Trustworthy Bankruptcy Lawyer in San Diego?
The BK Lawyer group aims to encourage debtors to file for bankruptcy by helping them see the clear picture of what constitutes filing for bankruptcy. We guide our clients through the process and keep every step transparent. With over 20 years of experience, our lawyer group provides all inclusive client services for Chapters 7 and 13, as well as bankruptcy recovery, asset protection, exemption and repossession. Contact us for a free initial consultation.
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