Debtors who qualify for Chapter 7 bankruptcy may receive a bankruptcy discharge for their qualifying unsecured debts. The court will appoint a bankruptcy trustee to oversee all Chapter 7 bankruptcy cases. The bankruptcy trustee has several duties which they are expected to perform impartially and fairly.
Tasks completed by the bankruptcy trustee
The first step completed by the bankruptcy trustee is a thorough review of all forms, papers, and financial information which is submitted by the debtor to the bankruptcy court. The bankruptcy trustee will review all the information including property information, income information, debts listed, pay stubs, tax returns, and information about the debtor’s assets.
All information must be reviewed for accuracy. The bankruptcy trustee is the first auditor in the process to ensure debtors are not fraudulently submitting information to the court or they have not made mistakes in their financial calculations.
341 Meeting of the Creditors
Next, the bankruptcy trustee is expected to lead the 341 Meeting of the creditors. At this meeting, which is attended by the debtor and any creditors who choose to attend, the bankruptcy trustee will ask the debtor questions. They will also facilitate the questions and answers submitted by the creditors. This meeting is generally held about a month after the debtor has submitted their bankruptcy petition and allows for verification of all submitted information under oath.
Liquidating Nonexempt Assets
One of the most important jobs of the bankruptcy trustee in a Chapter 7 bankruptcy case is to gather all of the debtor’s nonexempt assets and liquidate them to generate funds to repay qualifying creditors. The bankruptcy trustee will not liquidate assets which have been exempted under federal or state bankruptcy laws.
Part of the liquidation process is determining the value of all nonexempt assets. The goal of the trustee is generate as much money as possible through the liquidation. After this process is complete, or if there are no assets to sell, the bankruptcy trustee will provide a report to the court.
Verify no fraudulent or illegal transfers occurred during the bankruptcy
The bankruptcy trustee must follow all rules and regulations outlined in bankruptcy laws. They also must ensure the debtor has obeyed the law. This can include verifying that the debtor has not made any preferential transfers or improperly executed security interests.
For example, if you repaid a family member a debt owed to them within a specific time before filing bankruptcy this could be illegal. If this did occur, the bankruptcy trustee may have the legal right to get the money or property back and give it to the proper creditors.
Do I need a lawyer?
Although the bankruptcy trustee can help you with some elements of the bankruptcy case, they are not your legal adviser. If you need specific help with your bankruptcy case it is important to seek legal help from a bankruptcy lawyer. Bankruptcy lawyers are tasked with ensuring you file your petition and other forms properly and legally.
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