Bankruptcy and the Tough Job of the Trustee


It was recently reported that the forecast for the economy is not good. Many economists are expecting inflation to continue to rise through 2012. This added with higher fuel costs and unemployment, it is expected for bankruptcy filings and foreclosures to increase over the next couple of years. With so many people filing for bankruptcy, courts are overwhelmed with cases. When a bankruptcy petition is filed with the court it is assigned to a bankruptcy trustee to oversee the entire proceeding. An individual filing for bankruptcy will first meet the trustee at the meeting of the creditors, or the 341 meeting. This meeting usually doesn't involve creditors at all unless the creditor has suspected the debtor of wrongdoing or fraud. This meeting usually lasts around 10 minutes and allows the trustee to ask the debtor any questions about their bankruptcy. It is the bankruptcy trustee's duty to see if all the information in the bankruptcy petition is complete and truthful. The trustee reviews the assets to see if there are any that are not protected by an exemption, and decide whether they could be sold for a substantial amount to divide amongst the creditors.

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Many times, a trustee has to be tough to do their job right. The bankruptcy trustees aren't appointed to make your life miserable. If you're honest and play by the rules a bankruptcy filing can be relatively painless. Depending how you look at it, many times the bankruptcy trustee actually is representing the individuals filing for bankruptcy. Every day they deal with people that are in the same situation, most of them have lost their job or just got caught overspending. They are people too and know that you wouldn't be there unless you had to.

The reason a bankruptcy court trustee's job is so tough is that they have to be a middleman between the creditors and debtors. Basically, in a Chapter 7 the trustee's duty is to make sure the creditors get paid what they are entitled to and the debtor is being honest. In a Chapter 7 bankruptcy, the bankruptcy trustee only gets paid $60 from the filing fee and if the debtor gets a fee waiver, they get nothing. The only way they get paid any more is to collect money for the creditors. This is what gives the trustee an incentive to look for assets that are unprotected by exemptions and can be liquidated easily. The downside to a trustee's job is if they don't protect the creditor's interests, they can be sued by the creditor. When filing for bankruptcy honesty is the best policy. If you cooperate with the trustee they will usually give you the same respect.

Remember, if they need to take property, they are not being unsympathetic, they are just doing their job. The more property an individual has to protect, the more important it is to consult with local bankruptcy attorney. A bankruptcy attorney from your district has dealt with the bankruptcy trustee many times and knows what is required. This can make your bankruptcy goes smoothly with a discharge coming with no complications.


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