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What Is the Trustee’s Role in a Chapter 7 Bankruptcy?

What Is the Trustee’s Role in a Chapter 7 Bankruptcy?What Is the Trustee’s Role in a Chapter 7 Bankruptcy?

A trustee is a court-appointed officer charged with managing a Chapter 7 bankruptcy case. The trustee’s principal role is to act as the bankruptcy court’s agent, insuring compliance with the law and protection of the debtor’s and creditors’ rights. In practice, the trustee, who is also a lawyer, will take all actions and make all decisions that do not require a judge’s intervention.

Examine your petition

The first action by the bankruptcy trustee will be to examine your petition for completeness and to ensure it complies with legal requirements. The trustee will also review the forms on which you listed your income, assets and debts and will review the supporting documentation, such as pay records, bank account statements and financial statements.

Creditors are required to file proofs of claims detailing the debts they claim you owe them. The trustee will review those claims and, approximately one month after you file your bankruptcy petition, will call a meeting of creditors. Most times, none of the creditors attend the meeting unless they feel the debtor is hiding or misstating assets. The trustee will question you under oath to further confirm that you are accurately reporting all your assets to the bankruptcy court.

Determine eligibility of assets

The trustee then determines the eligibility of assets for exemption from the bankruptcy estate. In Chapter 7, possessions of a debtor are liquidated in order to generate funds to pay off creditors. However, certain possessions are shielded from liquidation. They include clothes, jewelry, home furnishings and a vehicle and home equity up to a certain value. The trustee collects and inventories all of your nonexempt assets, which will eventually be sold off.

Can claims or transfers be voided

The trustee is also charged with deciding whether certain secured claims or asset transfers can be considered void. Any transfers of property or payments made to certain creditors or other parties before filing for bankruptcy will be reviewed. If the trustee determines that payments or transfers were improperly made (to a relative, as an example), the trustee may attempt to “claw back” that transfer or payment and place it back in the bankruptcy estate.

An experienced Georgia bankruptcy attorney can be your advocate throughout the Chapter 7 process, helping you deal with the trustee on all issues. From offices conveniently located in Athens, Douglasville, Gainesville, Lawrenceville, Marietta and Scottdale, Jeff Field & Associates assists people with bankruptcy matters throughout the Atlanta metropolitan area and beyond. To schedule an appointment call 404-381-1278 or contact us online.

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