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The Role of the Bankruptcy Trustee

If you plan on filing bankruptcy protection, or are in the process of a bankruptcy, it is important to understand what is going on in these proceedings. Not only should you be aware of the exemptions available to you, but you should also know who is going to be dealing with your assets.

Every state has trustees.  In Arizona, the trustees are appointed by the court to your bankruptcy case. Typically in Arizona, trustees specialize in Chapter 13 or Chapter 7 bankruptcies.

What is a bankruptcy trustee?  What does a bankruptcy trustee do?

A trustee is a person that is assigned to your bankruptcy case. The trustee represents the interests of the creditors (the people to whom you owe money)

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The United States Trustee appoints a private trustee to oversee both Chapter 7 and Chapter 13 bankruptcy proceedings. The Unites States Trustee program delegates duties to the private trustees.  The role of the trustee is to supervise bankruptcy proceedings to ensure compliance with laws and procedures.  The goal of the United States Trustee Program (a branch of the Department of Justice), is to promote the efficiency of the bankruptcy program and to protect the integrity of the program.

Some assets are sold during a Chapter 7 bankruptcy in order to bring about money to pay creditors. This is a duty handled by and delegated to the private trustee. Assets not exempt from creditors are collected by the trustee.  Next, the trustee liquidated to money in order fulfill bills owed to creditors. Generally, the private trustee takes the collected money and disburses it to the creditors.  Also the trustee administers the estate of the debtor during the bankruptcy.

In which case a private trustee would be unable to serve or fulfill his or her duties, the United States Trustee steps in.

Phoenix Bankruptcy Lawyers know the Arizona Bankruptcy Law, the Bankruptcy Process, and the Arizona Trustees

A hearing called a meeting of creditors takes place in a Chapter 7 and Chapter 13 bankruptcy.  In this meeting, the trustee is in charge.  What takes place at the meeting of creditors?  Referring to your case, the trustee reviews documents and may ask you questions they have about your bankruptcy. At this hearing a trustee can determine whether to claim your filing was improper, or to decide to object to your discharge.

What is your relationship with the bankruptcy trustee? 

You should  cooperate with the trustee.  As the debtor, you cannot block the trustee’s work.  However, if the trustee makes a request that seems unreasonably difficult to comply with, or that would require you to spend a lot of money or time to comply with, you should have a discussion with your attorney.