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What are the duties of a bankruptcy trustee?

On Behalf of | May 16, 2024 | Bankruptcy

Once you file for bankruptcy, you will meet with a trustee who will investigate the case. As an officer of the Department of Justice, the trustee will recommend whether your case should go forward and then administer funds as ordered by the court.

While they are not required to have a law degree, they must have the financial and legal knowledge to carry out their duties.

The roles of a bankruptcy trustee

The roles of a trustee can vary depending on the type of bankruptcy you must file. These are their main functions in Chapter 7 and Chapter 13 cases.

  • Chapter 7 bankruptcy: A trustee will raise litigation issues, such as potential abuse of the process or unreasonable fees from your lawyer. If you have property that is not exempt from creditors’ reach, the trustee may sell it and give the money to creditors.
  • Chapter 13 bankruptcy: A court appoints a trustee who supervises the private trustees administering Chapter 13 cases. This court-appointed official will not liquidate your assets but will evaluate your finances and make recommendations regarding the repayment plan.

Regardless of the type of case you file, you will undergo a meeting with creditors during the bankruptcy process. The trustee will facilitate this conference, review the debts and relevant documents and decide how much money the creditors should receive.

Learn how a trustee can help

Remember that a trustee’s role does not include representing you during the process. They are an independent investigator who can help with litigation issues when your case does not comply with the bankruptcy code.

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