The bankruptcy trustee is a common term many people come across while learning about bankruptcy. He/she is an official assigned to oversee certain aspects of bankruptcy. The trustees assigned for chapter 7 and chapter 13 can be different as their role is usually different. The goal of a bankruptcy lawyer is to ensure the bankruptcy process is carried out smoothly and there is no conflict between the lenders and the borrower.
Bankruptcy trustee’s profile
Bankruptcy trustees might have historically been bankruptcy attorneys. They are appointed by the Department of Justice in the USA. Like many government job profiles, the number of trustees is allocated based on the district population. Considering higher cases of bankruptcy accounting for Chapter 7, you might find a 70:30 ratio amongst the trustees for Chapter 7 and Chapter 13. In some smaller districts where the bankruptcy cases are historically lower, you may see one standing trustee for each chapter. There have been situations where a single trustee has been assigned to handle all Chapter 13 bankruptcy cases.
The appointment of the trustee is done through the bankruptcy court’s office. It is random usually and the bankruptcy filer is notified the same using a Form 309A. Form 309A consists of contact information, name, and the date of assignment for the bankruptcy trustee. To know more about trustees and bankruptcy, log on to https://recoverylawgroup.com/bankruptcy/.
Role of a bankruptcy trustee
The role of a bankruptcy trustee can vary based on the Chapter. The role of a trustee as per Chapter 7 can be listed as follows-
- Reviewing information submitted by the filer.
- Determining the accuracy of the information submitted by the buyer
- In case of any incumbency, they can initiate a criminal investigation as well
- Conduct meetings with the borrower and lenders
- Liquidate non-exempt property to recover some debts
- Recouping a property or an asset that was disposed of or granted recently to protect it from liquidation
The role of a bankruptcy trustee under Chapter 13 just usually excludes the sale of any assets owned by the filer. Typically, it would include negotiating with the filer and the lenders for a feasible payment plan, which is fair to the lenders and feasible to the filer. Once the payment structure has been approved by the bankruptcy court, the trustee also plays an intermediatory with the payments to ensure there is no inconsistency or dispute arising in distribution to the lenders. If you are in Los Angeles and Dallas, TX, dial 888-297-6203 now and get immediate assistance.
Fees for the bankruptcy trustee
The fee is very nominal for a bankruptcy trustee who is handling a chapter 7 case. It can be $60 or thereabouts varying from district to district. This fee is further enhanced with the sale of assets that are used to suffice the lender’s dues. It is like a diminishing percentage of the assets used to release the debt. It starts from 25% of the first $5k and declines further as the amount increases. Overall, it can be interpreted, in a pure asset case, bankruptcy lawyers do make a significant living out of it.
In the case of a Chapter 13 case, the fees are likely paid out as a processing charge for handling monthly payments the borrower is liable to make to the lenders. If your trustee isn’t fair, and there are behavioral issues, one can reach out to US Trustee’s Office to report any such incidents. However, it is important to note that the goal of a trustee is to ensure the maximum debt is settled for the lenders inside the purview of exemptions and law code. Hence, not many bankruptcy filers find love with the trustees.