If you are planning to file for bankruptcy, you should come to terms with all the rules and people involved within the bankruptcy court and its proceedings. One of these is the bankruptcy trustee, whose role it is to guide you through your precarious situation and find the best solution to your particular debt situation.
All bankruptcy trustees have years of training behind them in addition to three years of bankruptcy and law courses. They also undergo an RCMP investigation, which gives them additional credibility.
Usually, you can expect a first complimentary consultation then the bankruptcy trustee’s wage is regulated by the government so you will not have very high prices to pay.
What can the bankruptcy trustee do for you?
- Counsel you on how to tackle your particular debt problem and explain further possibilities including debt consolidation and how to file bankruptcy.
- Help you with negotiations between you and the creditors to see if you can settle debts in a friendly way.
- Layout a proposal to offer your creditors so you can avoid filing for bankruptcy, which will only add to the expenses you already have.
- Determine which assets you sell if it becomes necessary in order to refund your creditors should you have to file for bankruptcy.
Some people actually think that a bankruptcy trustee is an enemy. This is far from the truth. A trustee is there to help you get through your debt crisis and his or her duty is to solve the situation for the best of both you and your creditors.
In the initial phase a bankruptcy trustee will review the bankruptcy petition and all the documents that are relative to the filing in order to determine if anything is missing for a correct bankruptcy filing. The next step is to study the personal situation of the debtor and examine his assets and debts. The bankruptcy trustee will examine all the background information that is related to your bankruptcy case. You may need to provide documents and information included in the bankruptcy petition.
It is important to realize that a bankruptcy trustee has a twofold interest. His or her role is to find non-exempt assets, which will help in the filing. A trustee must find and recover all possible assets in order for the debtor to refund the creditors. Note that the bankruptcy trustee gains a percentage of any recovered assets.
Should you be filing under Chapter 7 as a business concern you may find that the court will allow the trustee to let a business continue to operate for a certain period, if this will help refund debts. This includes businesses that can liquidate any goods and transform it into cash in order to pay back their debts. The trustee can organize a bankruptcy sale on your business site to covert goods into cash. In this chapter the bankruptcy trustee will be looking for non-exempt assets and if found you will be asked to hand them over to the court who will then put them up for sale. Once the funds have been raised from the bankruptcy sale the cash will be distributed amongst your creditors who have filed with the bankruptcy trustee and have been approved.
When you file under Chapter 13 your bankruptcy trustee is there to find out how much you can really afford to refund. The trustee will lay out a repayment plan for you to pay back your debts each month. Your income and expenses are calculated and reviewed in order to pay back debts without leaving you crushed. This plan has to be approved by the bankruptcy court after which the trustee receives a compensation that is calculated as a percentage on your monthly payments.
In Chapters 7 and 13 the bankruptcy trustee is also charged with examining and objecting to claims of proof that oppose the debtor’s discharge. This will occur if the trustee suspects there has been improper conduct or fraud on the debtor’s side. It is his or her responsibility to provide information to all those interested in the filing and report to the administration following the case.
This does not exclude that the bankruptcy trustee can act for the debtor’s interests and may file a lawsuit against creditors. This usually occurs when the trustee is trying to reclaim property due to the debtor. Actions may also be filed by the trustee to determine both fraudulent and privileged transfers to friends or creditors.
When filing for bankruptcy and having to deal with a bankruptcy trustee keep in mind that his or her role is to liquidate all possible assets belonging to the debtor to get rid of the debts by refunding the creditors.