When you file for bankruptcy, the court will appoint a trustee appointed to your case. The bankruptcy trustee will have various roles. The trustee is there to review the petition, look for red flags and fraudulent claims. His goal is to maximize the amount of money that your creditors will receive.
Who Pays the Bankruptcy Trustee?
Your trustee will be paid based on the type of bankruptcy and the circumstances of that petition. If you have no assets for the trustee to sell, then the trustee will only collect money through tax refunds, lawsuits, and other actions. Sometimes, you pay an administrative fee as part of your filing fee. In Chapter 13 bankruptcy, the trustee is paid a percentage of your payment plan approved by the court.
Whom Does the Trustee Represent?
While the trustee may appear to be on your side, he is there for your creditors. But the trustee is not an employee of the creditors. Part of his job is to ensure that you are not making false claims in your bankruptcy petition. He will also try to ensure that your creditors receive the maximum amount possible from your bankruptcy estate. The trustee will be looking for ways to convert your assets into cash and to help reduce the settlement value.
Duties of the Trustee
The trustee assigned to your bankruptcy case will have many duties – and those duties can vary depending on the type of bankruptcy you are filing. Some general duties that they will perform include:
- Reviewing your bankruptcy petition and all associated documentation.
- Examining the bankruptcy filer under oath.
- Reviewing records and investigating financial transactions to assess your petition.
- Objecting to your claims for exemptions.
- Protecting and preserving your assets.
- Objecting to creditor claims that are inappropriate.
- Pursing any actions against creditors who received fraudulent transfers.
- Liquidating any non-exempt assets in order to pay down debts outstanding.
- Avoiding transfers or security interests.
Your trustee also has the duty to object to your discharge of debts if he or she feels that you are not entitled to dissolve a particular debt under the law. Your trustee does not work on his or her own, either. The trustee will be directly supervised by the Office of the United States Trustee, a division of the Department of Justice. Trustees will have their own supervisors to whom they report.
Are You Considering Bankruptcy? Contact a Bankruptcy Attorney Right Away
If you are considering bankruptcy, it is important that you speak with an attorney first. An attorney can help you decide which type of bankruptcy is right for your financial situation. A lawyer can also ensure that your bankruptcy trustee does his job properly.