What Does a Bankruptcy Trustee Do?
If you’ve read any information about bankruptcies, then you’ve seen the phrase “bankruptcy trustee” more than once. Wondering what a bankruptcy trustee is, and what they do? Keep reading!
A bankruptcy trustee is the court-appointed person who oversees your bankruptcy. Think of them as the case manager. They are in charge of getting the debts settled, transferring whatever payments are ordered to the debtors, and ensuring that you have disclosed all your assets on your filing. This is only part of what they do, but it’s a good overview. Once a judge has determined that you can file a bankruptcy, the bankruptcy trustee takes over as the primary authority on the case.
10 Things a Bankruptcy Trustee Does
Now that you know what the bankruptcy trustee is in broad terms, here’s what they do in more detail:
- They liquidate your assets in a Chapter 7 bankruptcy. This means that they are in charge of seizing and selling your assets to pay back the percentage of debt still owed. There are many exemptions to what can be seized, and it is up to the bankruptcy trustee to make sure you aren’t taking advantage of exemptions.
- They manage communication with creditors. Any creditors who are owed a settlement through the bankruptcy must talk to the trustee to get their payment. They cannot harass you for the payment.
- They check your filing for proper listing of assets.
- They talk to your creditors and inform them of their legal rights. Yes, you read that correctly – the trustee will offer legal advice to creditors if they need to seek payment from you. The trustee’s primary concern is getting your creditors paid.
- They help raise more funds to pay back your creditors by finding other ways that you can pay. For example, they may look through your recent financial transactions to determine if you have recently tried to move or obscure assets that could be seized.
- They will tell creditors if there are more funds available, which means your creditors will know if they can seek more money from the courts.
- They will determine which creditors have higher priority, which means they determine who gets more money from a settlement. They may also determine who gets paid at all in certain types of bankruptcy.
- They send payments to the creditors when payments are scheduled.
- They negotiate settlements for the debtor so that both parties are in agreement. Remember that they are there to make sure the debtors get paid, not to protect your assets.
- They keep all bankruptcy rules and laws in mind throughout the entire proceeding. They’ll make sure that everyone is following the law as determined by the bankruptcy court.
Bankruptcy Trustees Are Why Bankruptcy Lawyers Are Important
Bankruptcy trustees, as you can see, are not on the side of the person in debt. It’s their job to sort through your assets, and your financial history, and determine whether or not you have more to pay to your creditors.
A bankruptcy lawyer on the other hand, is there to represent you and your interests. Their primary goal is to help you get out from under debt without parting with assets, and to keep you above water when you’re paying off what is owed after the ruling. If you want to know how a bankruptcy lawyer in NYC can help you get through a bankruptcy without a ton of loss, schedule a free consultation today. We can help you understand how this tool works, and how you can be protected with great representation. Call us at 212-244-2882.