When you file for bankruptcy, a trustee will be appointed to oversee and manage your case. Their primary role is to ensure that the bankruptcy process runs smoothly and that both you and your creditors are treated fairly.
The trustee’s responsibilities cover a wide range of duties, including administrative, legal and financial tasks.
Duties of a trustee
Throughout the bankruptcy process, the trustee will act as an intermediary between you and your creditors. They will hold a meeting of creditors, also known as the 341 meeting, where you will be required to answer questions about your financial situation under oath. The trustee will also have the authority to ask you further questions or request additional documentation if necessary.
The trustee will review your bankruptcy petition, schedules and other documentation to verify the accuracy of the information provided. They will ensure that you have disclosed all of your assets and liabilities, and that you have completed required credit counseling and financial management courses.
One of the trustee’s main responsibilities is to collect and liquidate your non-exempt assets to pay off your creditors, if you have filed for Chapter 7 bankruptcy and you own significant non-exempt assets, which very few Chapter 7 filers do. The trustee will evaluate your non-exempt assets to determine which ones can be sold or used to satisfy your outstanding debts. They will then distribute the proceeds from the sale of these assets according to the priority established by the bankruptcy code.
A trustee’s powers
While the trustee is responsible for managing your bankruptcy case, it’s essential to remember that they are not your legal representative. They represent the interests of the court (and even your creditors, to some extent) and are required to adhere to the rules and regulations set forth by the bankruptcy court.
The trustee also has the power to object to any exemptions or discharge of debts that you may have claimed. If they find any evidence of fraud, misrepresentation, or other wrongful conduct, they can take legal action against you or refer the matter to the United States Trustee for further investigation.
It’s crucial to maintain open and honest communication with your trustee. It’s also essential to comply with any requests for information or documentation and to attend all meetings and court appearances as required. Of course, you can ask your attorney any questions you may have about the trustee’s role at any time as well.