You have finally come to the decision to file for bankruptcy. You undoubtedly had a difficult journey reaching this point, but you may now feel a sense of relief knowing that you have a direction to go that can help you get back on financial track. Of course, bankruptcy has many facets that you may not entirely understand.
In particular, you will not have full control over your bankruptcy proceedings. Rather than carrying out many of the steps yourself, a bankruptcy trustee will act on your behalf in some cases and make sure that you carry out the right actions in other instances. This person acts as an unbiased party in terms of your bankruptcy case.
Why is a trustee needed?
You may understandably wonder why a separate person needs to play such a role in your bankruptcy case. What you need to know is that after filing for bankruptcy, a bankruptcy estate forms. This estate becomes a separate entity from you, and as a result, another person — the trustee — needs to step in to handle the bankruptcy estate. The court appoints an individual to act in this role, and you do not have say in who takes the position.
What are a trustee’s duties?
Depending on the type of bankruptcy you file and the specific details of your case, the trustee may carry out a variety of duties. If you file for Chapter 7 bankruptcy, this process involves liquidating your assets and distributing the proceeds to the appropriate creditors. However, you will not carry out these actions yourself. The bankruptcy trustee involved in your case will handle this responsibility, which will include the following steps:
- Gathering your non-exempt property
- Liquidating that property
- Distributing the proceeds to the applicable creditors
Additionally, your trustee may also challenge claims made by creditors if he or she believes that the claims do not warrant a place in your bankruptcy filing. On the flip side of that duty, the trustee may also object to the discharge, or forgiveness, of any of your debts if he or she believes that they are not dischargeable.
A trustee is only one person who will play a role in your bankruptcy case. You will also come in contact with many other individuals, and it may prove wise for you to have an advocate on your side. Enlisting the help of a bankruptcy attorney could help you understand your case and assist you in working toward the desired outcome.