By liquidating assets to pay off debts or establishing a repayment plan, bankruptcy laws enable individuals who can no longer pay their creditors to start over. The vast majority of personal bankruptcies are filed under Chapter 7 or Chapter 13
Unless there are urgent circumstances, anyone who wishes to file for bankruptcy will be required to undergo credit counseling prior to filing. A pending foreclosure is an excellent illustration of a difficult circumstance. The credit counselor must appear on a list approved by the Office of the United States Trustee in the filing jurisdiction. If there are exigent circumstances, the debtor must still undergo counseling shortly after filing. In addition, before receiving a discharge in the bankruptcy case, the individual must complete a financial education session through an approved agency.
Our Maryland bankruptcy attorneys at Kurland Law Group have years of experience in the field. We make it our mission to address bankruptcy trustees’ concerns and to take prompt legal action in this regard. If you have any questions, please do not hesitate to call us or make an appointment for a complimentary consultation.
A trustee is an individual who oversees the management of property held in trust for another party, such as a company’s assets. Whether the beneficiary is an individual or a company, it is the trustee’s duty to administer the property in a fair and impartial manner for the beneficiary’s benefit. This obligation extends to the recipient. A bankruptcy trustee is one type of trustee whose responsibility is to supervise the bankruptcy filing process.
The United States Trustee Program, housed within the Department of Justice, is responsible for the trustee selection process. These trustees are private individuals with extensive knowledge of business, accounting, management, and bankruptcy-related legal issues. In the Trustee program, the role of a trustee within the legal system is described as a “watchdog over the bankruptcy process.”
Depending on the type of bankruptcy filed, the Trustee Program will appoint a trustee to oversee the case and the assets when a person files for bankruptcy. The trustee’s responsibilities will vary depending on the type of bankruptcy filed. The trustee is responsible for supervising the activities of the parties involved in the bankruptcy and ensuring that the process is carried out in accordance with applicable laws and the specific type of bankruptcy being handled.
The trustee is compensated monetarily for the services rendered during the bankruptcy administration. Not only is it possible for the trustee to be compensated for their services, but they can also be reimbursed for reasonable expenses incurred while carrying out their duties.
When you file a petition for bankruptcy under Chapter 7, the court will appoint a bankruptcy trustee to oversee your case and protect your rights. The trustee who will supervise your Chapter 7 bankruptcy will be chosen from a pool of independent bankruptcy trustees. Your bankruptcy case will be handled by the trustee from the moment it is filed until it is finally discharged, which typically occurs between three and four months after the initial filing of the case. This typically occurs between three and four months after the initial filing of the case.
The following is a list of the duties that must be performed by the trustee assigned to your Chapter 7 bankruptcy case:
Additionally, the trustee manages the creditors’ meeting in your bankruptcy case. The meeting of creditors, also known as the 341 hearing, occurs four to six weeks after the filing. You must attend. Creditors may also attend and ask questions, although their presence is rare. The typical length of a 341 meeting is five minutes.
You will be questioned by the bankruptcy trustee at the meeting of creditors after swearing to tell the truth. The trustee will likely inquire about your income; this provides another opportunity for the trustee to confirm the accuracy and consistency of the information you provided in your schedules. The trustee may also inquire about your property, such as how you determined the worth of your home or car.
If the trustee determines that none of your assets can be sold to repay unsecured creditors, he or she will likely declare that you have “no assets.” The trustee will later file a report stating that no distributions will be made to creditors if your case has no assets.
Your bankruptcy case officially begins when you file your Chapter 7 petition, schedules, and supporting documents with the court. These documents provide the court with information regarding your debts, assets, income, intentions regarding certain types of property and contracts, and financial standing. You must provide the trustee with income verification (such as six months of pay stubs or a profit-and-loss statement if you are self-employed) and typically two years of tax returns after filing. Some trustees may require you to bring additional paperwork.
The trustee reviews your bankruptcy documents to ensure that you are telling the court the truth and that there are no signs of fraud or abuse. The trustee may request additional information from you if he or she has questions about your financial situation.Additionally, the trustee verifies that all of your financial information is accurate and consistent
In your bankruptcy schedules (a component of your bankruptcy filing documents), you are required to list the value of each of your assets. The trustee in bankruptcy will verify the accuracy of your valuations. If something appears out of the ordinary, the trustee’s office will request additional documentation to support the amount listed on your documents.
If the trustee believes a lender’s security interest or lien is invalid, he or she may also contest it. When you purchase property with credit, such as a house or car, you often grant the lender a security interest or lien on the property. On occasion, the creditor makes an error on the lien or security interest evidence document. For instance, the lender may have missed an essential signature or improperly recorded or filed the document. If such a flaw exists, the trustee may be able to invalidate the lender’s interest and sell the property for the benefit of all creditors.
In Chapter 7 bankruptcy, the trustee is responsible for selling the nonexempt assets of the debtor in order to repay unsecured creditors. Nonexempt assets are those that are not protected by exemption laws. The trustee cannot touch property that is protected by an exemption statute.
In certain circumstances, the Chapter 7 trustee may recover property you transferred to a third party prior to filing for bankruptcy (also called a preferential transfer). Prior to filing for bankruptcy, it is against the law to conceal assets or favor one creditor over another. In such a case, the trustee may reclaim the property for distribution among your creditors.
For more information Chapter 7 Bankruptcy Trustee’s role or any clarification on bankruptcy matters, the best next step is an initial consultation. Kurland Law Group is a debt relief agency. The firm helps people file for bankruptcy relief under the Bankruptcy Code.
Contact the firm to arrange a free confidential initial phone consultation today.
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