Bankruptcy can be a difficult process to navigate, especially on your own. If you are navigating through Chapter 7, Chapter 13, or Chapter 12 bankruptcy, you may be appointed a bankruptcy trustee to help manage your case. A bankruptcy trustee might review financial documents, oversee the distribution of assets, and overall ensure your bankruptcy case is taken care of. In this blog, we will be diving into what exactly a bankruptcy trustee is and their key responsibilities.
What is a Bankruptcy Trustee?
A bankruptcy trustee is appointed to you through court for your bankruptcy case. They are typically individuals who have experience in bankruptcy law such as attorneys or accountants and they act as a neutral third party during the bankruptcy case. The duties of the trustee vary depending on which type of bankruptcy you are dealing with.
Here is a breakdown of their duties for each type of bankruptcy:
Chapter 7 Bankruptcy
Chapter 7 bankruptcy helps individuals and businesses get rid of most of their debts by liquidating assets. In Chapter 7 bankruptcy, the trustee is in charge of reviewing your assets to determine if any of your non-exempt assets can be liquidated to repay creditors. Other duties include:
- Reviewing Financial Documents: The trustee examines your bankruptcy petition and supporting financial documents, such as income statements and tax returns, to ensure they are accurate.
- Conducting the 341 Meeting: The trustee conducts the 341 meeting, where you meet with creditors and get asked questions about your finances under oath.
- Distributing Funds to Creditors: If the trustee liquidates any of your assets, they are in charge of distributing the funds to creditors.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is a process that allows individuals who have a regular income to create a repayment plan to pay back their debts. In Chapter 13 bankruptcy, the trustee focuses on making sure that you follow the repayment plan that you agreed to. Additional roles include:
- Reviewing the Repayment Plan: The trustee will make sure the plan decided upon is feasible and fair to creditors. If necessary, they may work with you to modify the plan.
- Collecting Payments: The trustee is responsible for collecting monthly payments from you and distributing them to your creditors for the agreed-upon repayment plan.
Chapter 12 Bankruptcy
Chapter 12 is a less common type of bankruptcy, but can still offer the use of a bankruptcy trustee. Chapter 12 is specifically for family farmers and fishermen and is designed to allow them to reorganize their debts and keep their business operating. The bankruptcy trustee has similar roles as in Chapter 7 and 13 bankruptcy such as overseeing the payment plan, conducting the 341 meeting, and collecting and distributing payments. The only difference is it is specialized for agricultural and fishing businesses.
How Trustees Are Chosen
The way that a bankruptcy trustee is chosen for your case differs depending on the type of bankruptcy case. Typically, they are appointed by the U.S. Trustee Program, a division of the U.S. Department of Justice. Trustees must meet certain qualifications such as legal and financial expertise, panel membership, and bond requirements. They are typically financially trusted individuals such as attorneys and accountants. Once approved, trustees are automatically assigned to a case based on specific jurisdictions.
Get Help Navigating The Bankruptcy Process
Bankruptcy trustees can be extremely helpful in navigating bankruptcy cases. Whether they are liquidating assets in a Chapter 7 case or managing repayment plans in Chapter 12 and Chapter 13 bankruptcies, trustees ensure a smooth bankruptcy process.
If you are considering filing for bankruptcy in Georgia but want more information regarding the process, contact the legal team at Duncan & Brow, Attorneys at Law, LLLP. Our Georgia bankruptcy lawyers can assess your situation, determine what legal options you have, and help you get started on the path to financial independence.
