Duties of a Bankruptcy Trustee

  • Bankruptcy

Duties of a Bankruptcy Trustee – Chapter 13 Bankruptcy

The notice of appointment of a bankruptcy trustee is sent to the debtor after the filing of bankruptcy has been received by the court. The notice carries the information about the name, address and phone number of the trustee. Moreover, if your trustee needs additional financial information, such as bank statements, and details of tax returns, and cancelled checks, it is intimated to the debtor in this notice along with the date on which these are due.

Here’s a detailed description of the duties of a bankruptcy trustee:

Administration of the bankruptcy estate– The assets and properties of the debtors are cumulatively referred to as a bankruptcy estate. In a Chapter 13 filing, the trustee manages the claims that are aimed at the estate, and it indicates that all the assets are now under the direct control of the court. The liquidation or any action on this estate needs to be approved by the bankruptcy trustee. Other important notes on the bankruptcy estate.

  • If the debtor receives any property or becomes entitled to receive it within 3 months from the filing of bankruptcy, then it needs to be reported as inherited property/ entitled to inherit, property from a marital settlement or a divorce or the benefits after a death or life insurance proceeds
  • In cases of the inherited property to be non-exempt, then the repayment plan needs to be revised to pay off the unsecured creditors as appropriate as needed

Collecting of Proof of Insurance–The trustee needs to ensure that there is enough proof on the insurance of the collateral that the debtor will use to pay off the creditors, specifically on mortgage dues and car loans. This proof is needed and is an advantage to the creditor if the collateral is damaged

Payment collection– The first payment that the debtor needs to facilitate is within 30 days from the filing of bankruptcy. This first payment is mandated by the trustees to be done by cashier’s check or through money order. The payment of the first due confirms the capability of the debtor to clear off his dues in the stipulated period using the repayment plan. Subsequent plan payments are expected to be facilitated directly from the wages of the debtor – the trustee will file a wage order for the same shortly after the case

Creditors meeting–  The trustee ensures that the submitted financial facts are detailed and question the debtor who attends the meeting with any queries regarding the same. The trustee can also challenge the feasibility of the repayment plan especially if the expenses are high or not reasonable

Confirmation Hearing– The trustee is part of the confirmation hearing of the bankruptcy case and this meeting is scheduled approximately twenty to forty-five days after the creditors meeting. He shares the approval on the repayment plan to the judge and also raises concerns if there are objections from his end or from the creditors. The Confirmation Hearing can be rescheduled if the trustee’s requirements haven’t been met by the debtor or his attorney

Fulfilling the court order–All approved plans by the court are effectively dealt for its complete and effective fulfilment by Chapter 13 bankruptcy trustee. The financial affairs of the debtor are reorganized and the payments to the creditors are channelized. The trustee will closely work to prevent any activities of abuse or fraud towards the debtor’s estate. And at the end of the case, after all, obligations are fulfilled, the final filing with the court is done by the trustee and the remaining debts are recommended to be discharged

Debtor’s advocate–Though it may sound very stringent about the trustee’s role in the bankruptcy filing case, the trustee still acts quite fair and favourable for the debtor. The professional costs are made reasonable while the assets get liquidated and also protect any harassments that can probably be targeted towards the debtor by the creditors. They also refer to all violations to the U.S. Trustee’s office and secure the bankruptcy arrangements.

When debtors co-work effectively with the trustee for following the terms on the repayment plan, then they are assured that the debtors will have complete control over their assets. They can also seek the services of a bank attorney who works diligently for the debtor’s sake and to adhere to the trustee’s expectations. Recovery Law Group’s team of bankruptcy attorney, Los Angeles, Dallas and in the state of Nevada can be approached.