A trustee plays a very important role when
you file for bankruptcy. The role was initially created for collecting and
distributing the debtor’s property, relieving responsibility from the court and
creditors. Now, the bankruptcy trustee’s responsibilities differ based on the
type of bankruptcy you are filing for. What remains constant is that they
continue to be impartial when handling the debtor’s assets and act under the
supervision of the court and U.S. trustee officers.
Since Chapter 7 Bankruptcy focuses on liquidation, the trustee’s main duty is to oversee the process as well as the payment to creditors. The trustee in charge will round up and sell all the debtor’s non-exempt assets as well as challenge the creditors’ claims if necessary. In certain cases trustees can also earn from the properties they sold, ranging from 3-25% in commission from the total sales.
In Chapter 11 Bankruptcy, the trustee helps reorganize and settle the obligations, debts and assets of the corporation. This type of bankruptcy is the most complex and time consuming since its benefits and applications are often most suitable for businesses.
Chapter 13 Bankruptcy is filed for when the debtor wishes to keep some of his/her assets and instead focuses on creating and upholding a sustainable repayment plan. The appointed trustee’s role is to review the proposed plan and make objections if necessary. Once the repayment plan is approved, the trustee will be in charge of collecting payments and distributing them to creditors.
The role of the trustee, lawyer, court, and
creditors are among the things you as a debtor need to be familiarized with
when you file for bankruptcy. For a more comprehensive legal advice, please
call us here at Sherman Law Firm, P.C. and schedule a free consultation today.
We currently cater to individuals, families, and businesses in the Fort Worth
and Bedford, Texas area.