Chapter 7 Bankruptcy: What Does The Trustee Do?
During chapter 7 bankruptcy, the majority of your assets will be sold in order to pay off your creditors. This allows you to be completely free from all of your current debt. In order to file for this type of bankruptcy, you need to select a bankruptcy trustee. This person will oversee the entire filing process and has a lot of responsibilities within your bankruptcy case. Here is more information about the responsibilities and duties of the trustee.
They Review Your Documents and Petition
The first step to filing for chapter 7 bankruptcy is filing a petition. This petition must include documents pertinent to the case, such as your personal and financial information. It includes information about your assets and property, your current income, what your financial struggles are, and how much debt you have. You also need to provide proof of income, such as tax returns and pay stubs. Your trustee is the person who reviews all of these documents and helps to verify them. They will look at your documents and calculations and be sure everything is accurate when you file for bankruptcy.
They Conduct a Hearing
After you file for bankruptcy, you will need to attend a hearing, which is conducted by the trustee. Your creditors usually are not going to attend the hearing unless they have reason to believe you have assets that you are hiding, so the bankruptcy trustee becomes the person leading the hearing. While it is called a "meeting of creditors," don't expect many creditors to show up. During the hearing, the trustee will ask you questions while you are under oath about information in your bankruptcy file. They may ask about income, assets, self-employment wages, and any number of questions about what you wrote in your documents. Since you are under oath, you must be truthful.
They Liquidate Your Assets
Not all of your assets will be liquidated to pay off creditors, but all nonexempt ones will. The trustee is responsible for gathering your nonexempt assets and selling them in order to pay off your creditors and remove your debt. If you have any property that goes above the amount your state allows, it becomes nonexempt and can be sold by your trustee. In some cases, your vehicle, a certain amount of money in your bank account, and personal belongings will be exempt. It is the trustee's responsibility to determine the value of your assets and figure out what creditors to pay off with these assets.
When you file for chapter 7 bankruptcy, make sure you are honest with your trustee and work with them to help get your debt resolved. Talk to places like Richard S. Ross - Bankruptcy Attorney for more information.
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