Your Bankruptcy Trustee: How Do They Fit In?

If you have filed for some debt relief using Chapter 7 bankruptcy, you may soon learn about getting a trustee. This person is in charge of your bankruptcy case from the time you file it until the final discharge comes down. Most filers have limited contact with their trustee in person, but that doesn't mean they don't fill an important role with your case. For some guidance on what your bankruptcy trustee might want from you during the process, read on.

What To Know About Your Relationship

Your trustee is not anything like your bankruptcy lawyer. You don't have a confidential relationship with your trustee and they are not in any way on your side. They are not necessarily adversarial either, though. Instead, you can consider them a neutral party charged with ensuring that everything goes smoothly. Trustees are usually former or current judges or lawyers experienced in bankruptcy law. They must follow strict rules about your case. In many cases, all of your communications with your trustee will be through your bankruptcy lawyer.

How Trustees Are Paid

You should know that your trustee is paid a certain percentage based on any property they seize from you during the bankruptcy. They are also paid a flat fee on each case because very few filers end up having any property seized at all. That means trustees take a very special interest in your assets. Property can be seized, sold, and the proceeds can go to some of your creditors, but your trustee gets a portion too. However, state exemptions allow almost all filers to retain their property with a Chapter 7 filing. Ask your lawyer about these exemptions that preserve your personal property.

When Contact Comes

Though things can vary by state, the only time you are likely to actually see your trustee in person is at the creditor's meeting. Trustees tend to preside over these quick and easy court appearances. If the trustee wants to perform an inspection of your property, and they have that right, they are likely to send a representative rather than go themselves. You will, however, find the trustee's name on every piece of correspondence that arrives from the bankruptcy federal court.

Trustees are also tasked with looking over your bankruptcy paperwork, investigating past financial transactions, calling hearings when issues arise, and declaring your bankruptcy debts discharged. To find out more, speak to a Chapter 7 bankruptcy lawyer.