Facts about Bankruptcy Trustees
At the Nowack & Olson blog, we write a lot about the bankruptcy trustee, who is the person overseeing your bankruptcy. But who are trustees? And where do they come from? Read on for information about the people who will administer your bankruptcy estate.
- Most trustees are lawyers. This should not be surprising. The trustee’s key role is to administer the estate. In a Chapter 7 bankruptcy, this means selling certain property and distributing the proceeds to unsecured creditors. These creditors need someone who is careful and who understands what property can be legally sold, so lawyers make great candidates.
- The trustee represents creditors, not you. This might be surprising. After all, the whole purpose of filing for bankruptcy is to benefit you personally. However, trustees owe duties to creditors to find as much non-exempt property as possible so that unsecured creditors get back some of the money they lent you. The trustee isn’t your enemy, but they are not your friends, either.
- The trustee is second in power only to the judge. In many Chapter 7 cases, you will never see a judge. However, you will see the trustee. The trustee has the power to investigate your case, ask for more information, and raise objections to your schedules and exemptions. Although a judge has the final say in a dispute, judges certainly trust a trustee’s judgment.
- You pay the trustee—basically. Even though he or she does not work for you, you still end up paying the trustee. Technically, a Chapter 7 trustee will take a percentage of the non-exempt assets they find for creditors. But since it is your property, that means you are paying them. The same is true in a Chapter 13. The trustee will take a percentage of your monthly payment to creditors as their fee.
- You will rarely see the trustee. In many Chapter 7 liquidations, the debtor only sees the trustee at the 341 Meeting of Creditors. An experienced bankruptcy attorney, however, might know the trustee if they have appeared on the same cases.
- You can complain about a trustee. You might not think the trustee is performing their duties according to the law. In that situation, you can complain about them. Since any dispute between you and the trustee will end up before a judge, you can raise your objections there. You might also file a complaint with the United States Trustee Program. However, it is important to realize that some disagreements are legitimate, especially when dealing with gray areas of the law. Let your bankruptcy lawyer sort out whether the trustee has a legitimate disagreement with you or whether they are breaking the law.
Speak to a Bankruptcy Lawyer in Plantation, Florida
Are you in financial trouble? If so, a bankruptcy might be exactly what you need to turn over a new leaf and start afresh. At Nowack & Olson in Plantation, we advise consumers just like you about your options. Please contact us today by calling 888-813-4737.