What does a trustee do?
In both Chapter 7 and Chapter 13 bankruptcies, it’s the trustee’s duty to review your bankruptcy forms and investigate and verify your financial information.
One of the trustee’s responsibilities in doing this is to make sure your bankruptcy claim is not fraudulent.
In addition to ensuring you have a legitimate claim, your trustee in a Chapter 7 bankruptcy is responsible for managing your assets. That includes …
- Collecting your property
- Converting your assets to cash
- Distributing the proceeds to your creditors
The trustee will also facilitate the meeting of creditors.
In a Chapter 7 bankruptcy
The main job of a Chapter 7 bankruptcy trustee is to sell your nonexempt property and repay your creditors as quickly as possible. (In a bankruptcy case, an exempt asset is property you get to keep. Exemptions can vary from state to state.)
The Chapter 7 trustee is also required to decide if your nonexempt property can be sold in order to pay back a significant portion of your debt. If so, you’ll have to turn that property over.
In a Chapter 13 bankruptcy
A Chapter 13 trustee is responsible for overseeing your repayment plan. That includes …
- Making sure your plan is reasonably affordable
- Collecting your payments according to the plan
- Distributing payments to your creditors
The trustee also holds the meeting of creditors in a Chapter 13 bankruptcy.