Dealing with a Trustee in Bankruptcy

When a person petitions the court to file for bankruptcy, the United States Department of Justice appoints a person known as a Trustee in Bankruptcy to help oversee the case and make sure that all proceedings are deemed appropriate under the law. The trustee can sometimes act as a mediator between the debtor and the creditor.

The first thing the Trustee in Bankruptcy must establish is how much the bankruptcy estate is. This includes any and all property and related property rights of the debtor. The trustee is then responsible for turning these assets into cash in order to satisfy the accounts of the debtor in a fair manner.

Once the estate has been appraised, the Trustee in Bankruptcy must send ample notice to the debtor of the intent to sell their property. This notice is normally 20 days and gives the person enough time to object to the sale. These sales are normally completed through private sales or public auctions. The trustee is responsible for holding on to the monies collected from the sale of all properties to disperse between all creditors fairly.

There are two different types of bankruptcy cases that an individual will file. These are Chapter 7 and Chapter 13 bankruptcies.

Chapter 7 bankruptcies are filed by those who have no tangible property that can be sold to satisfy any debts. This is one of the easier cases to handle for Trustee in Bankruptcy. In this type of case, the trustee meets with the creditors, looks in to the property holdings of the debtor, and ensures that all of the proceedings adhere to the laws. The file step in a Chapter 7 bankruptcy is for the trustee to report his or her findings back to the court that the debtor has no assets and the case is closed; relieving the debtor of all debt.

Chapter 13 bankruptcies can be thought of as an attempt to repay the debts rather than be absolved of them. The trustee in this type of case appears at the hearings, advises the debtor the best way to reorganize their debts and provide continuing assistance to the debtor to ensure that the repayment plan is followed.

When an individual finds themselves in a position where bankruptcy is the out there are certain processes that must be followed. After the bankruptcy petition is filed there is going to be a Trustee in Bankruptcy assigned to the case. This trustee is there on the behalf of the creditor not the debtor.