What Is The Role Of A Chapter 7 Trustee?
When you file for bankruptcy relief, your case will be assigned to a bankruptcy trustee. In a bankruptcy filed under Chapter 7 of the Bankruptcy Code, your case will be assigned to a Chapter 7 trustee to administer the case for the Office of the United States Trustee. The role of a Chapter 7 trustee is often confused with the role of a judge; however, the Chapter 7 trustee is not a judge. He or she is an individual appointed by the Office of the United States Trustee to administer the bankruptcy estate. The main rule of a Chapter 7 trustee is to liquidate the non-exempt assets of the debtor and use those proceeds for the benefit of the unsecured creditors. However, the role of a Chapter 7 trustee encompasses much more than simply being a liquidator.
Duties That Fall Under the Role of a Chapter 7 Trustee
A Chapter 7 Trustee is an impartial party appointed to oversee the administration of the case. The trustee has several responsibilities and duties to carry out in his or her role as a trustee.
Review Bankruptcy Documents
The Chapter 7 Trustee will review the petition, schedules, tax returns, motions and other documents filed with the court to verify the information contained in the documents as well as review the information for accuracy. For example, if a debtor reports that he does not own a vehicle, the trustee may perform a quick check of the property taxes to verify that the debtor does not own a vehicle. The trustee is looking for inconsistencies or inadequacies in the documents filed with the court.
Conduct the 341(a) Meeting of Creditors
Another role of a Chapter 7 Trustee is to preside over the First Meeting of Creditors and examine the debtor under oath. The trustee will ask the debtor a series of questions regarding the debtor’s assets, debts, income, expenses and financial matters to determine if further action is required to properly administer the bankruptcy estate for the unsecured creditors. If the trustee feels that more information is required in order to make a final determination as to whether the case is an asset or no-asset case, the trustee may request further information and hold the case open until he can review the information at a later date.
Liquidate Non-exempt Assets
Of course, the most notable role of a Chapter 7 Trustee is to act as a liquidator for the unsecured creditors. If the debtor has assets that have equity that is not exempt, the trustee will sell those assets and use that money to pay the unsecured creditors on a pro-rata basis.
Avoid Transfers and Security Interests
The Chapter 7 Trustee has the right under the Bankruptcy Code to avoid transfers and security interests under certain circumstances. The trustee will review the financial history of the debtor to determine if transfers have been made or security interests granted that violate bankruptcy law.
Experienced Bankruptcy Attorneys Serving Kentucky Families Since 1982
The bankruptcy lawyers at Musselwhite Meinhart & Staples have been helping individuals just like you since 1982. We understand the stress, frustration and anxiety caused by debt problems and we offer hope to those struggling with a financial crisis. Bankruptcy offers you a fresh start to recover from your financial crisis to begin rebuilding your finances for you and for your family.
Call our office as 270-351-6032 or to schedule a free bankruptcy consultation with one of our bankruptcy lawyers. If you prefer, you can send a secure message through our online contact form and one of our helpful staff members will contact you to answer your questions about bankruptcy. We have offices in Radcliff and Elizabethtown and Louisville for your convenience.