Every bankruptcy case will have a trustee, so it’s important to understand this individual’s role.
A trustee is a court-appointed administrator. They are selected by the DOJ’s U.S. Trustee program. Lawyers and certified accountants are the most likely candidates.
Their job is to oversee the debtor’s estate. They work on behalf of the court. They have access to your financial records throughout the process. They’re also the individual that interviews you during your 341 hearing.
In a Chapter 7 case, this will mean managing the sale of nonexempt property and then using it to pay off lenders. They will also review and compare your filing to other documents you submit, like your bank statement and tax returns. If you made improper pre-bankruptcy payments, the trustee might be involved in clawing those back. They will also ensure you meet means tests for Chapter 7.
Chapter 13 involves receiving your monthly payments and distributing them to creditors on the payment plan. The trustee will also assess whether you meet means testing for Chapter 13 and whether the proposed payment plan meets legal requirements for the minimum amounts your lenders must pay.
In both cases, if fraud exists in a bankruptcy case, the bankruptcy trustee is the one who will be investigating and uncovering it.
Sometimes, it may be wise to have your bankruptcy attorney speak to the trustee on your behalf to work out certain issues or provide the trustee with more information and context about your finances. Always remember the trustee is not your friend and does not work for you. If the trustee wants to speak to you, refer them to your lawyer or ensure the lawyer is with you while you conduct that conversation.
For the most part, any interactions you have with the trustee should be fairly routine. For many filers, the reactions will be utterly forgettable. While it may seem scary to get another person so involved in your finances, the process runs very smoothly for the most part.
If you have any questions about working with a bankruptcy trustee or filing for bankruptcy, please don’t hesitate to contact our office. Thinking about filing for bankruptcy? Schedule your free consultation today.
See also:
How to Find All Your Debts for Your NJ Bankruptcy Case
The Most Common Bankruptcy Filing Errors
What Newark, NJ Residents Need to Know About the Bankruptcy Means Test