The Case Trustee in a Chapter 7 Bankruptcy

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Many debtors are intimidated by the case trustee in their Chapter 7 bankruptcy case, but there’s no need to feel that way. Honest debtors who do their best to comply with the bankruptcy court’s requirements have no need to fear the bankruptcy trustee.

When you file a Chapter 7 bankruptcy case, the bankruptcy court trustee appoints an impartial case trustee to administer your case. The case trustee’s job includes:

  • Collecting all of your nonexempt assets and reducing them to money — that is, liquidating your nonexempt assets so they can be sold and the money used to pay off your creditors
  • Creating and managing your bankruptcy estate
  • Investigating your finances to ensure you are not hiding assets or income
  • Investigating your creditor’s claims and objecting if those claims are not well-founded
  • Remaining accountable for all property received, and creating an interim and final accounting
  • Avoiding the transfer of certain assets or security interests, if that transfer happened within 90 days of filing your bankruptcy declaration or it’s incomplete or otherwise imperfect

Generally, how the case trustee distributes your assets to your creditors should not affect you very much. In a Chapter 7 bankruptcy, nearly all of your unsecured debts are discharged once the process is over. What’s more important is that you as the debtor works with your case trustee to ensure that the process is complete as possible.

If you hide or forget about assets, your case trustee may not recommend discharge for your remaining debts at the end of the process. And if you hide or forget about debts, it can mean that you go through the entire bankruptcy process but still have debt left over that could and should have been discharged.

Topics:  Chapter 7, Consumer Bankruptcy, Trustees

Published In: Bankruptcy Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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