What is the Trustee’s Job in a Bankruptcy Case in New York City?
If you file bankruptcy in New York City an impartial trustee will be assigned to review and administer your case, but they are not there to assist you. A trustee is actually paid through your bankruptcy estate and may therefore have an increased incentive to squeeze you to the max. It is the role of the trustee to evaluate your bankruptcy petition verifying the accuracy of all the financial information provided and checking any supporting documents in your case. They look at things like pay stubs and bank accounts to ensure the accuracy of your bankruptcy filing. The trustee has responsibilities to the court, and ethical requirements to uphold, but they should not be confused with the bankruptcy court judge who will not profit from your case.
After you file your bankruptcy petition you will be required to appear at a hearing in front of the trustee known as the 341 (a) meeting of creditors. It sounds scary, but is actually just an informal meeting where the trustee will ask you a series of straightforward questions about your bankruptcy petition under oath. Your creditors have a right to appear at this meeting as well, but unless they believe you are hiding something they will usually not even bother to attend. If they do happen to come your lawyer will be with you to assist with any questions the trustee or creditor may have.
After the meeting of creditors most of our clients will have no further interaction with the trustee. Upon speaking with you and reviewing your paperwork it is now the job of the trustee to find a way to repay some of your creditors by selling off at least a portion of your non-exempt assets. If all your assets are exempt the trustee simply reports to your creditors that no funds will be returned to them in your bankruptcy case. If you do have non-exempt assets the trustee may liquidate at least some, if not all of them distributing the proceeds to your creditors after your assets are sold.
In New York City bankruptcy trustees also have the power to look into your past for any preferential payments that may have been made to friends or family members before your filing. Transferring property or repaying personal loans before filing bankruptcy could get you or a family member into an even bigger financial mess. Some trustees are especially aggressive in looking for these “fraudulent conveyances,” which are usually honest mistakes that have nothing to do with real fraud, but that could get you into a lot of trouble nevertheless. It’s another reason to find a qualified bankruptcy attorney if your plan to file bankruptcy in New York City.
Trustees don’t typically mess around, and aren’t interested in helping people file for bankruptcy. They are professionals that know what to look for in the paperwork you give them. For the best results you need a professional on your side too. If you live in New York City and would like to see what a fresh start on your finances would look like please contact the Law Offices of William Waldner online or at 212.244.2882 to arrange a free consultation today. We only practice bankruptcy law and maintain a 99% Chapter 7 bankruptcy discharge record in New York City as of 8/31/16.
**** DISCLAIMER: This article is intended for educational purposes only. By reading no attorney-client relationship has been created. Prior results do not guarantee a similar result for future clients.