Understanding the Role of The Bankruptcy Trustee
People in Rockland County who may be contemplating filing a petition in bankruptcy court will want to know who will be controlling their fate after they file a petition. Most people realize that the bankruptcy judge will have the final say over whether and how their debts are paid, but very few people are aware of an official called the bankruptcy trustee and the trustee’s role in the bankruptcy process.
Understanding the role of the trustee begins with the concept of the bankruptcy estate. A bankruptcy estate is automatically created when the debtor files the petition. The estate consists of all property owned by the debtor that is not exempt from claims of creditors. The estate becomes an independent legal entity. The bankruptcy trustee is an official appointed by the court to take possession and supervise the handling of the bankruptcy estate. The exact duties of a trustee depend upon the specific circumstances of the case, and whether the filing is under Chapter 7 or Chapter 13.
Under a Chapter 7 filing, the trustee is responsible for collecting and managing all of the debtor’s non-exempt property and selling property to provide money with which to pay creditors’ claims. The trustee may occasionally challenge creditors’ claims against the estate and on occasion, object to the discharge of the debtor. In a Chapter 13 proceeding, the trustee reviews the debtor’s plan of reorganization, makes necessary objections, collects payments from the debtor under the plan and makes payments to creditors pursuant to the plan. All trustees operate under the supervision of the bankruptcy judge in charge of the case.
The bankruptcy trustee plays an important role in almost every bankruptcy case. Understanding the functions of the trustee and the role of the trustee in a particular case is important for debtors who have filed for bankruptcy, so they can have a brighter financial future.
Source: FindLaw, “What is a Trustee in Bankruptcy?,” accessed on April 16, 2018