What Is A Bankruptcy Trustee?
A bankruptcy trustee is a neutral third party appointed by the court to oversee the bankruptcy process for individuals or businesses. The role of the bankruptcy trustee is to administer the bankruptcy estate, which is made up of the debtor’s assets, and to ensure that the assets are distributed fairly to the creditors according to the provisions of the bankruptcy code.
There are two types of bankruptcy trustees: standing trustees, who are permanently appointed to a particular bankruptcy court, and case trustees, who are appointed on a case-by-case basis. Both types of trustees have similar duties and responsibilities, but case trustees are generally responsible for overseeing the administration of a specific bankruptcy case, while standing trustees may be responsible for overseeing multiple cases at the same time.
One of the primary duties of the bankruptcy trustee is to review the debtor’s bankruptcy petition and schedules to ensure that they are complete and accurate. This includes reviewing the debtor’s income, expenses, assets, and liabilities to determine whether the debtor is eligible for bankruptcy protection and, if so, what type of bankruptcy is appropriate. More info here.
Once the bankruptcy petition has been filed, the bankruptcy trustee will also be responsible for managing the debtor’s assets during the bankruptcy process. This may include selling any non-exempt assets to pay off the debtor’s debts, negotiating with creditors to reach a settlement, and distributing the proceeds of the sale to the creditors.
In addition to these responsibilities, the bankruptcy trustee may also be responsible for conducting a meeting of creditors, known as a 341 meeting, where the debtor is required to answer questions under oath about their financial affairs. The bankruptcy trustee may also be required to investigate any fraudulent activity by the debtor or to report any suspicious activity to the court.
Another important role of the bankruptcy trustee is to ensure that the debtor complies with the terms of their bankruptcy plan. This may include reviewing the debtor’s budget, ensuring that the debtor is making timely payments to their creditors, and monitoring the debtor’s progress towards completing their bankruptcy plan. Know the firm.
The bankruptcy trustee is also responsible for ensuring that the bankruptcy process is fair and transparent. This includes ensuring that the debtor’s assets are valued accurately, that the creditor’s claims are properly documented, and that the bankruptcy proceedings are conducted in accordance with the bankruptcy code and local rules.
In summary, the bankruptcy trustee is a crucial part of the bankruptcy process, responsible for overseeing the administration of the bankruptcy estate and ensuring that the assets are distributed fairly to the creditors. Their role is to ensure that the bankruptcy process is conducted in a fair and transparent manner and that the debtor’s rights are protected throughout the process.
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