Bankruptcy trustees play an instrumental role in managing bankruptcies and allocating funds to creditors. In each case, an unbiased bankruptcy trustee is assigned to supervise and carry out an array of tasks linked to the bankruptcy process. Here’s an overview of the trustee’s main roles and responsibilities. Contact The Law Offices of Paul Y. Lee at 951-755-1000 for legal assistance.
Assessing the Petition & Supporting Documents
The trustee in bankruptcy meticulously goes through all the paperwork associated with your bankruptcy petition, ensuring the information pertaining to your debts, assets, and income is accurate. They often resort to independent sources such as tax documents and salary slips to conduct their review. If you engage a bankruptcy attorney to assist with your petition, you can be confident that your paperwork will be meticulously prepared, leaving no room for the trustee to find any discrepancies.
Facilitating the Creditors’ Meeting
Roughly a month post-filing for bankruptcy, you’re required to participate in the Creditors’ Meeting. Interestingly, your creditors rarely attend this meeting unless they suspect dishonesty about your assets. Despite this, the meeting remains open to creditors and they can interrogate you under oath if they choose to attend. The bankruptcy trustee will certainly question you under oath to further validate the details mentioned in your bankruptcy petition.
Reversing Preferential Transfers
During the Creditors’ Meeting, one potential area of discussion is preferential transfers. These transfers involve money or property moving to specific individuals and/or creditors, granting them an unjust financial advantage over your other creditors. Transfers made to family members in the year preceding filing or to creditors within 90 days prior to filing may be classified as preferential transfers. If the bankruptcy trustee suspects a preferential transfer, they can revoke it and reallocate the funds fairly among all creditors.
Asset Liquidation (Exclusive to Chapter 7)
In a Chapter 7 bankruptcy, you must liquidate all non-exempt assets and properties. The bankruptcy trustee manages this process, assessing your property status to identify all non-exempt assets, selling them to yield the highest price, and dividing the proceeds among your creditors.
Overseeing the Repayment Scheme (Specific to Chapter 13)
Chapter 13 bankruptcy allows debtors to merge their debts into a single, 3-to-5-year payment plan. Under this bankruptcy type, the trustee is charged with collecting your monthly payments and distributing them to your creditors throughout the repayment period. The trustee is required to maintain a comprehensive record of all transactions, including funds received and disbursed.
If you are ready to hear more about bankruptcy, contact The Law Offices of Paul Y. Lee at 951-755-1000 for a consultation.
