What is the Role of the Chapter 7 Trustee?
- Date: 2007-08-31 - Word Count: 576
Share This!
Once a Chapter 7 bankruptcy case is filed, an impartial case trustee is appointed by the office of the United States Trustee. (In Alabama and North Carolina, the trustee is appointed by the court). The primary function of the Chapter 7 trustee is to administer the case and liquidate your non-exempt assets. In most cases, your assets are completely exempt and there is no property for the trustee to administer. The trustee will liquidate your non-exempt assets in a manner that maximizes the return to your unsecured creditors. The trustee can also pursue causes of action that you may have at the time your bankruptcy case is filed. A common cause of action is one to recover money or property that is owed to you.
The trustee also has strong avoiding powers. This allows a trustee to set aside preferential transfers made to creditors prior to your bankruptcy filing. This avoiding power may result in proceeds being distributed to unsecured creditors.
In addition to liquidating any non-exempt assets, the trustee has the duty of making sure that you have complied with the numerous bankruptcy laws that are enumerated throughout the Bankruptcy Code.
The trustee is often a local bankruptcy attorney; however, a trustee is not required to be an attorney. You can rest assured that the trustee will be a person who is very knowledgeable about Chapter 7, the court process and all of the necessary procedures to administer a case.
The trustee is mostly interested in what property you own, whether it can be exempted under the Federal or State laws and whether or not it can be administered for the benefit of creditors. The trustee has a vested interest in the property because he is partially paid on commission. That's right; the trustee may receive 25% of the first $5,000.00 administered, 10% of any amount between $5,000.00 and $50,000.00, and 5% of any additional amounts administered.
Many debtors wonder whether or not the trustee will want to search their homes for property. Although this is possible, it is highly unlikely. The trustee would have to believe that the debtor was not being truthful in his schedules or otherwise not complying with the trustee's requests.
The Chapter 7 Trustee's Work
The trustee will review the petition and schedules that you filed. He will review the exemptions to see if there is any property that can be administered. He will check your statement of intentions with regard to secured property and to leases. At the meeting of creditors, the trustee will investigate your financial affairs.
He will review your attorney's fees to see if they are in compliance with local standards for fees. If the fee paid by you was excessive, the trustee may bring a motion to have those fees reviewed by the court. To the extent that the fee is determined to be excessive, the court may order cancellation of the fee agreement or order that a portion of the fees be refunded to you.
He will check your state issued I.D. as well as your social security card. If there is a problem regarding those items, the trustee will report same to the United States Trustee.
If you miss your required meeting of creditors, the trustee may set a continued date or he may move to have your case dismissed.
Don't be alarmed by what the trustee does and what the trustee can do. In the majority of cases, the debtor's dealings with the trustee are limited to the relatively short meeting of creditors.
The trustee also has strong avoiding powers. This allows a trustee to set aside preferential transfers made to creditors prior to your bankruptcy filing. This avoiding power may result in proceeds being distributed to unsecured creditors.
In addition to liquidating any non-exempt assets, the trustee has the duty of making sure that you have complied with the numerous bankruptcy laws that are enumerated throughout the Bankruptcy Code.
The trustee is often a local bankruptcy attorney; however, a trustee is not required to be an attorney. You can rest assured that the trustee will be a person who is very knowledgeable about Chapter 7, the court process and all of the necessary procedures to administer a case.
The trustee is mostly interested in what property you own, whether it can be exempted under the Federal or State laws and whether or not it can be administered for the benefit of creditors. The trustee has a vested interest in the property because he is partially paid on commission. That's right; the trustee may receive 25% of the first $5,000.00 administered, 10% of any amount between $5,000.00 and $50,000.00, and 5% of any additional amounts administered.
Many debtors wonder whether or not the trustee will want to search their homes for property. Although this is possible, it is highly unlikely. The trustee would have to believe that the debtor was not being truthful in his schedules or otherwise not complying with the trustee's requests.
The Chapter 7 Trustee's Work
The trustee will review the petition and schedules that you filed. He will review the exemptions to see if there is any property that can be administered. He will check your statement of intentions with regard to secured property and to leases. At the meeting of creditors, the trustee will investigate your financial affairs.
He will review your attorney's fees to see if they are in compliance with local standards for fees. If the fee paid by you was excessive, the trustee may bring a motion to have those fees reviewed by the court. To the extent that the fee is determined to be excessive, the court may order cancellation of the fee agreement or order that a portion of the fees be refunded to you.
He will check your state issued I.D. as well as your social security card. If there is a problem regarding those items, the trustee will report same to the United States Trustee.
If you miss your required meeting of creditors, the trustee may set a continued date or he may move to have your case dismissed.
Don't be alarmed by what the trustee does and what the trustee can do. In the majority of cases, the debtor's dealings with the trustee are limited to the relatively short meeting of creditors.
Related Tags: bankruptcy, chapter 7, trustee, laywers
David M. Siegel is the author of Chapter 7 Success: The Complete Guide to Surviving Personal Bankruptcy. He is a member of the American Bankruptcy Institute and currently practices bankruptcy law in Chicago and its surrounding suburbs. Additional information is available at http://www.bankruptcy-lawyers-losangeles.com . Your Article Search Directory : Find in Articles
Recent articles in this category:
- Work Cover Lawyers Help Workers Favored In New Contingency Agreement
Were you ever given a small amount of compensation after having been injured on your job? Have exper - Florida Last Will And Testament Information
A person who is at least 18 years of age can complete a Florida Last Will and Testament and is refer - Florida Durable Power Of Attorney Information
A Florida durable power of attorney is a legal document that designates a person to act on behalf of - California Power Of Attorney Information
In California any adult person who has the ability to enter into an agreement can complete and sign - Criminal Lawyer
Sexual assaults are increasing with alarming frequency and everyday there are news reports about var - Fort Lauderdale Foreclosure Lawyer Explains, Foreclosure Is Not Your Only Option, You Have A Choice
Foreclosure has been one of the foremost topics within the real estate world in recent years, as eac - Should You Make A Personal Injury Claim?
Personal injury claims now gain wider exposure than ever before, yet many people are still unaware o - Mesa Bankruptcy- Regain Financial Stability
Are you drowning in overwhelming debt? Is it causing you mental, emotional and physical distress? Ta - How Bankruptcy Can Help You Financially Start Over With A Clean Slate
Fed up with debt? Desperately want to be free from the unbearable problem? If yes, then you should n - Major Yasmin Birth Control Side Effects
Yasmin is a popular form of hormonal birth control that has been heavily marketed, especially to you
Most viewed articles in this category:
- Be Aware of Single Owner LLC Tax Problems
One of the more popular business entity choices these days is the limited liability company. If - 14 Tips on How Parents Who Have a Child with a Disability Can Organize Their Estate
Copyright © 2007 L. Mark Russell As a general rule, parents should keep their original document - IF OUR PETS WERE REALY OUR "MINOR CHILDREN" MOST OF US "PARENTS" WOULD BE IN JAIL FOR CHILD NEGLECT
As a pet owner, do you need to have a pet trust or will in your estate plan? Well, maybe so, given - The Last Will And Testament - A Model NOT To Live By
The death of Anna Nicole Smith has at least one valuable outcome, even if it is simply serving as a - The British Constitutional Reform Act
The Constitutional Reform Act of 2005 changed the British hitherto unwritten constitution by in - Patented Drugs
While a drug or process is under patent, other companies are wary of working anything even remote - Divorce and Debt
As common sense and statistics tell us, the leading cause of marital discord is money. Therefore - The Misunderstood World of Corporate Minutes
The corporation is the most used form of business entity in the United States. While many people - Attorney for Legal Services
All of us hire lawyers at one point or the other. People get sued, arrested, charged for a crime, - Should Parents EVER Leave an Inheritance Outright to a Child who has a Disability?
Copyright © 2007 L. Mark Russell There are few absolutes in estate planning, but this is one. I