Posted on: 23 November 2020
Almost all bankruptcy fillings result in the assignment of a bankruptcy trustee to oversee a filer's case. (In two states, these leadership positions are filled by a bankruptcy administrator with the duties being similar to that of the trustee). Read below to find out more about the role trustees play in bankruptcy proceedings.
Scrutinizing Your Filing – One of the primary responsibilities of the trustee is to check over the bankruptcy paperwork for errors and discrepancies. Certain irregularities may catch the trustee's eye and result in further investigation. That can include filings with an extremely high amount of debt. More debt usually means more assets and assets are of interest to the trustee (more about that below).
Check on Your Assets – Chapter 7 bankruptcy can come with the prospect of losing your property. The trustee holds the power to seize assets from a filer, sell them, and use the proceeds to pay administration costs and creditors. While homestead and other exemptions do a lot to protect a filer's assets, some filers try to shed assets before they file in fear of losing them. For example, a filer might sell a boat six months before they file in the hopes of keeping it safe. The trustee, though, has a responsibility to find out about asset transfers prior to the filing and take back the asset if necessary. Talk to your bankruptcy lawyer if you have given away or sold an asset in the last few years.
A related action can also occur. The trustee (or their representative) can visit your home or other locations where assets are kept and inspect your belongings. This only occurs rarely but you should be prepared for it to happen to you. The inspection consists of photographing and noting assets. No property, however, is taken at that time and you will have plenty of advance notice of the visit. You might be interested to know that the trustee can make money when the property is seized.
Overseeing the Creditor's Meeting – The only time many filers ever come into contact with the trustee is at the creditor's meeting. They usually sit at the head of the room and call the cases one at a time. Ask your bankruptcy lawyer about the questions you will be asked when it's your turn to stand and take the oath. If a creditor appears at the meeting (and this is very rare), you will know about it ahead of time. In most cases (depending on where your name falls alphabetically) you will be in and out of the hearing in a matter of minutes.
For more information about the role of the bankruptcy trustee, speak to your lawyer.Share