Bankruptcy trustees are responsible for administering bankruptcies and directing cash to creditors
An impartial bankruptcy trustee is appointed in every case to oversee and administer the various tasks related to the bankruptcy. The main duties and responsibilities of the trustee include:
Reviewing the Petition & Documentation
The bankruptcy trustee reviews all the paperwork involved in your bankruptcy petition, to verify that information about your debts, property, and income is correct. They typically use independent sources of information like tax records and pay stubs to complete their review. Of course, if you use the services of a bankruptcy attorney to prepare your petition, you can rest assured that all documentation will be in order and the trustee will not find anything objectionable.
Running the Meeting of Creditors
About a month after filing for bankruptcy, you will have to attend the Meeting of Creditors. This meeting is actually rarely attended by any of your creditors unless they believe you are lying about your assets. However, the meeting is open to creditors and should any choose to come they may ask you questions under oath. The bankruptcy trustee with definitely question you under oath to further confirm the details of your bankruptcy petition.
Revoking Preferential Transfers
One of the topics that may be asked about during the Meeting of Creditors is preferential transfers. These are transfers of cash or property to certain individuals and/or creditors that gave them an unfair financial advantage over your other creditors. Transfers made to family members in the year prior to filing and to creditors in the 90 days prior to filing could be deemed preferential transfers. If your bankruptcy trustee believes a preferential transfer has been made, they can revoke it and redistribute the money fairly among all creditors.
Liquidating Assets (Chapter 7 only)
During a Chapter 7 bankruptcy, you are required to liquidate all non-exempt assets and property. Your bankruptcy trustee will handle this process, verifying the status of your property to identify all non-exempt assets, selling them in a manner that will get the best price, and distributing the proceeds to your creditors.
Administering the Repayment Plan (Chapter 13 only)
Chapter 13 bankruptcies allow debtors to consolidate their debts into a single payment plan lasting 3 to 5 years. In this type of bankruptcy, the trustee is responsible for receiving your monthly payments and distributing them to your creditors for the entire duration of the repayment period. The trustee is expected to keep a detailed account of all transactions including funds paid and disbursed.
