Hudson Valley bankruptcy lawyer explains the role of the bankruptcy trustee

New clients at our Hudson Valley bankruptcy law firm sometimes wonder what a bankruptcy trustee does. During a bankruptcy case, the bankruptcy court will assign each debtor to a bankruptcy trustee; a debtor may not request a particular trustee. A bankruptcy trustee plays a very important role in a bankruptcy case and is sometimes the only individual associated with the court that a debtor has contact with during the bankruptcy case.The role of a bankruptcy trustee varies depending on whether the debtor files for Chapter 7 or Chapter 13 bankruptcy.

Trustee in Chapter 7 case

In a Chapter 7 bankruptcy, a liquidation of the debtor’s assets, the bankruptcy trustee’s job is to act as the administrator of the debtor’s bankruptcy estate. The trustee evaluates the debtor’s assets and determines which assets are non-exempt, and therefore eligible for seizure. After the trustee seizes the debtor’s non-exempt assets, the assets then become part of the bankruptcy estate. Next, the trustee sells the debtor’s non-exempt assets to raise money to repay the debtor’s creditors.The bankruptcy trustee is responsible for running the 341 meeting, or the meeting of the creditors.  During the 341 meeting, the trustee will ask the debtor questions about the debtor’s financial situation and any information contained in the bankruptcy petition. The debtor’s creditors may appear at the meeting and question the debtor as well. In most cases, this is the extent of the trustee’s interaction with the debtor during a routine Chapter 7 bankruptcy case.

Trustee in Chapter 13 case

In contrast, a Chapter 13 bankruptcy trustee’s role is to monitor the debtor to make sure the debtor is fulfilling all terms of the debtor’s Chapter 13 repayment plan. During the repayment plan, the debtor makes one monthly payment to the Chapter 13 trustee, who then must pay all of the debtor’s creditors according to the terms of the plan. The trustee must ensure the debtor is making all payments on time and in full each month.

For information and assistance with your bankruptcy

Often, clients who choose to work with our firm are seeking legal assistance for the very first time in their lives. While this can be intimidating, we want to assure you that our Hudson Valley bankruptcy attorneys will offer you support and information throughout each phase of the process.If you would like to arrange for a free consultation, simply complete the case submission form on this page. We will respond promptly. If you prefer, feel free to email us or call us.

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