What To Know About Your Bankruptcy Trustee
Declaring bankruptcy is a big step, but knowing what to expect can help ease the stress and confusion of the situation. Once you file, you will be assigned a bankruptcy trustee, who will be managing your bankruptcy case from now until its final petition. While you should still count on your bankruptcy attorney to lend you support during the months that it takes a bankruptcy to go through court, your bankruptcy trustee also fills an important role. Here is what to expect when dealing with your bankruptcy trustee.
Your first face-to-face meeting with your bankruptcy trustee could occur at the property inspection appointment. This meeting will be scheduled in advance, and you should makes plans to be at home or at the property location and have identification with you. The point of this inspection is to view property that may be seized and to assign a re-sale value on that property. The trustee will make notes and take photographs, but no property will be taken at this time.
You will be alerted well in advance if any property is to be later seized. Property is only seized if the trustee is reasonably confident that it can be sold and used to pay creditors. Normally, you personal property is excluded; so don't worry too much about your diamond wedding ring or your collectibles. On the other hand, valuable art, boats or other luxury items could be at risk of seizure. In some locations, a representative for the trustee appears at the inspection instead of the trustee. If you don't have much property, this visit may never even occur.
The Meeting of the Creditors
For many filers, the meeting of the creditors is their one and only encounter with the bankruptcy trustee. Normally, the trustee fills the role of the judge and presides over the meeting. You will stand when called and answer a few brief questions about your bankruptcy, and your "day in court" will be over in no time.
The Trustee's Pay
You may be wondering why the trustee's pay is any of your business, but it may well be. If you end up having to forfeit any property, the bankruptcy trustee gets a portion of the proceeds from the sale of that property. Federal law, which rules over all bankruptcy provisions, allows the trustee to earn:
- 25% of the first $5,000
- 10% of the next $5,000 to $50,000
- 5% of the next $50,000 to $1,000,000
If no property is seized, the trustee still gets about $60 per case.
It's worth mentioning that you must be completely accurate when listing your property on the your bankruptcy petition; your bankruptcy could be in jeopardy if the inspection turns up unlisted property. Be sure to speak to your bankruptcy attorney for more information on any aspect of your case.