The Role of Bankruptcy Trustee
A bankruptcy trustee is assigned to every Chapter 7 and Chapter 13 bankruptcy case. A trustee has a significant impact on a debtor’s case, but the exact role that a trustee plays in a bankruptcy proceeding is often uncertain. The Justice Department appoints a trustee for each bankruptcy who will often be a lawyer with significant experience in handling bankruptcy. Chapter 7 and Chapter 13 Bankruptcy The role of a trustee changes on the type of bankruptcy involved. Chapter 7 Bankruptcy. In these types of bankruptcy filings, the trustee administers the bankruptcy estate and distributes any non-exempt property to creditors. The trustee is paid through a percentage of any funds that are given to creditors. As a result, in situations where the debtor has no non-exempt assets, the trustee is paid a small amount. Chapter 13 Bankruptcy. The trustee in Chapter 13 bankruptcies is tasked with reviewing and following the Chapter 13 payment plan and distributing any payments made by an individual to creditors. A Chapter 13 trustee collects a percentage of funds paid through the payment plan. The Role of Trustees in a Bankruptcy Case A trustee often has several responsibilities in a bankruptcy. [...]