A Bankruptcy trustee is highly involved in the proceedings when someone files for bankruptcy. For example, a bankruptcy trustee may oversee the sale of property and the transfer of this money to the debtors in a bankruptcy case. In other cases, the bankruptcy trustee will handle payments from the debtor to creditors in a repayment plan.
The exact role of a bankruptcy trustee will depend on which type of bankruptcy you file for. In addition to working with a bankruptcy trustee, you will likely need to work closely with a qualified bankruptcy attorney.
In This Article
What Is Bankruptcy?
Bankruptcy is one option for debtors who cannot pay back what they owe. Bankruptcy allows lenders to get back some of the money they are owed but also provides some relief to the debtor, such as by canceling the debt they cannot pay back.
You can file for bankruptcy through the courts, but there are a few different types of bankruptcy. Two of the most common are Chapter 7 and Chapter 13.
- Chapter 7: In this type of bankruptcy, the debtor lists all of their assets and sells off any non-exempt property (should they have any). Exempt property does not need to be sold. The money from selling this property is then given to the creditors to repay the debt. From here, the debtor has the rest of the debt canceled.
- Chapter 13: Under this type of bankruptcy, the debtor creates a payment plan to pay back some portion of debts over several years. If the debtor is consistent with payments, the remainder of the debt is canceled after a set time. This type of bankruptcy is more plausible for people with more consistent income.
You will have to meet specific qualifications in order to file for either type of bankruptcy. Often bankruptcy is a last resort when someone owes substantial amounts of money. In some situations, there may be alternatives to filing for bankruptcy. Consulting with a qualified attorney can help determine what type of bankruptcy you should file.
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What Does A Bankruptcy Trustee Do?
Throughout the course of bankruptcy proceedings, one key individual is a bankruptcy trustee. The bankruptcy trustee is appointed by the court and helps oversee the communications and paperwork between the debtor and the creditors, particularly regarding your assets, income, and payments.
A bankruptcy trustee also helps oversee the information related to your financial situation. They can look at the situation and make recommendations based on your resources and the amounts you owe to your debtors.
However, the exact role of a bankruptcy trustee will vary depending on the type of bankruptcy you are filing for.
Types Of Bankruptcy Trustees
The type of bankruptcy determines the actions of the bankruptcy trustee, but they still oversee the transfer of money from you to your lenders. For example, consider the actions of bankruptcy trustees under Chapter 7 bankruptcy versus Chapter 13 bankruptcy:
- Chapter 7 bankruptcy trustee: Under a Chapter 7 bankruptcy case, the bankruptcy trustee reviews your assets and oversees the sale of any non-exempt property in order to repay your creditors.
- Chapter 13 bankruptcy trustee: Under a Chapter 13 bankruptcy case, the bankruptcy trustee will assess your income and oversee the transfer of payments to your creditors.
Getting Help From A Qualified Attorney In Your Bankruptcy Case
It can be challenging to handle the process of bankruptcy on your own. While a bankruptcy trustee helps oversee your assets and is involved in proceedings, having an attorney working specifically with your best interests in mind can be very helpful.
A bankruptcy attorney can help you throughout the entire process of filing for bankruptcy. For example, they can review the paperwork with you to ensure that you accurately provide all information. They can also help you determine if filing for bankruptcy is the best option based on your unique circumstances. In some situations, they may suggest certain alternatives.
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If you need help with your bankruptcy case, our legal team at Farmer & Morris Law PLLC is ready to help. We will review what happened in your specific circumstances and work to help you in any way we can. We can start by answering your questions.
We offer all of our clients a free consultation so that you can understand what we have to offer and how our firm qualifies to help you. You can contact us today to get started with your consultation.