The decision to file for bankruptcy is one that can set you on a new financial path. This is your chance to have a fresh start, but the process might be mystifying for some individuals. One thing that you might be curious about is what the bankruptcy trustee does.
When you file for bankruptcy, the trustee is responsible for making sure that the court gets the assets its due and that the proceeds from those go to your creditors. The exact duties that the trustee has depends on the specifics of the case.
Chapter 7 bankruptcy
In a Chapter 7 bankruptcy, creditor claims are only paid up to the amount the court can get from liquidating non-exempt assets. The trustee gathers those, sells them, and distributes the proceeds to the appropriate creditors in the correct amounts. They can also challenge creditor claims and object to the court issuing a discharge of a bankruptcy.
Chapter 13 bankruptcy
If you file a Chapter 13 bankruptcy, you’re responsible for making periodic payments to the bankruptcy courts. The trustee is who will get those payments and then distribute those payments to the creditors. They also review the repayment plan and make objections if any are necessary.
The bankruptcy trustee has some major duties to handle in these cases. While it’s a good idea to know what they’re going to do, it’s just as important for you to know your responsibilities so you can ensure you’re meeting those. The person you work with to file your bankruptcy should be able to help you with these matters.