What Does a Bankruptcy Trustee Do?
What Does a Bankruptcy Trustee Do?
If you are filing a Chapter 7 bankruptcy in NYC, you will quickly become familiar with the bankruptcy trustee. This is the person that has been court-ordered to oversee your bankruptcy case. It’s important to understand just what they will be doing, and what abilities they have when it comes to your bankruptcy. Here’s what you can expect from a bankruptcy trustee in NYC from start to finish.
Reviewing Documents and Information
First, the bankruptcy trustee will just review all the documents that have been submitted. This review is very close to an audit, with every figure being double checked to ensure accuracy. During this review, the trustee will verify that all your information is correct. They will look at things like tax returns, pay stubs, and other documents to verify what you reported for your income, for example.
Next, the trustee will schedule a 341(a) meeting, which you are required to attend. This meeting is open to any creditors who are owed money from you, who can come to ask questions. It is very rare that creditors ever do come to these meetings, however. During the meeting, you are placed under oath, and the trustee will ask you questions to determine the legitimacy of your bankruptcy. Their job here is to ensure that you have made an effort to pay back your debts, and are truly qualified to have a bankruptcy wipe the slate clean.
Selling Your Assets
The biggest thing that the NYC bankruptcy trustee does is to liquidate, or sell, any assets you have that are not exempt from seizure. For example, you may be allowed to keep a certain vehicle but not your classic hobby car, if its value is over a specific state-mandated limit. The trustee will oversee the seizure of these assets, and will sell them through legal channels.
At this stage, the trustee is now working for the benefit of the creditors. A Chapter 7 bankruptcy in NYC means that you won’t be held responsible for paying any more on your debts once the allowable assets are seized and applied to the debts. For every asset the trustee can seize, the more money the creditors get. And trustees are paid based on a percentage of funds that the creditors receive.
Managing a Chapter 13 Bankruptcy
If you filed a Chapter 13 bankruptcy, on the other hand, you will not have this division of assets to worry about. Instead, after the initial interview at the 341(a) meeting, the trustee will ether approve a payment plan suggested by you and your attorney, or set up a court-approved payment plan that consolidates all your debts into one regular payment. This payment will be based both on your debt amount, and on your ability to pay.
The trustee is then the person who manages this account. When you pay into it every month, the trustee removes the money and divides it up among all your creditors, till the debts are paid off. In this stage of a Chapter 13 bankruptcy, the trustee is working for you, helping you to manage paying off many debts all at once by doing the bulk of the administrative work for you.
Get the Best NYC Bankruptcy Representation
Need more information on what you can expect from the bankruptcy procedure? Contact my office today by calling me at 212-244-2882. My office specializes in the type of bankruptcy knowledge you need before you choose to file in New York City. Get a consultation and estimate today, and be on your way to a clean financial slate tomorrow.