Trustees play an important role in a Chapter 7 bankruptcy proceeding so it is important to understand what they do.
The Chapter 7 bankruptcy process can be an intimidating one for people who are living in Orlando. They must basically lay bare all of their financial information, their debt situation and then make sure that they do everything the court requires them to do. In addition to all of that, they have to work with a trustee. To make the process a little less scary, it is important for people to understand what the role of the trustee is.
They support the bankruptcy court
The primary role of a trustee is to support the bankruptcy court. According to The United States Department of Justice, private trustees are used to make sure that the tasks associated with bankruptcy are accomplished accurately and as quickly as possible. These people are under the direction of a U.S. trustee who is part of the DOJ.
They are not government employees
One of the mistakes that people make is assuming that a trustee is an employee of the bankruptcy court. This is not exactly true. The National Association of Bankruptcy Trustees states that most trustees hold careers as accountants or attorneys. They are appointed to a panel after going through a rigorous process that includes a background check conducted by the FBI.
They handle the liquidation of assets
To liquidate a debtor's assets, trustees often enlist the help of other professionals such as real estate brokers and auctioneers. Before the items are sold, the trustee must send all of the debtor's creditors information on the planned sale. Trustees are empowered to handle nonexempt property that includes the following:
- Business assets
- Vehicle equity
- Accounts receivable
- Bank accounts
- Rental property
Additionally, trustees may also arrange for the sale of valuable artwork, antique furnishings that are not exempt from the bankruptcy protection, recreational vehicles, stocks and other items of monetary worth. After the property is sold, the trustee then splits the money among the creditors in accordance to the court's direction after the administrative expenses are covered.
They oversee the meeting of creditors
Prior to the liquidation, the trustee is responsible for the meeting of creditors, often referred to as the 431 meeting. This involves notifying the creditors of when the meeting is scheduled and then formulating the questions that the debtor will need to answer.
A question outline through the Department of Justice indicates that these questions include confirmation of personal information, employment information, the confirmation of creditors, the existence of any domestic support obligations, and confirmation that the debtor read and signed all required documents pertaining to the bankruptcy.
For people in Florida, filing for bankruptcy can provide them the opportunity to rebuild their financial foundation. They may find it helpful to talk about their situation with an experienced attorney.