During the bankruptcy process, you will see a bankruptcy trustee. This is a court appointed attorney that will oversee your bankruptcy case - this is not your attorney. The exact involvement and role that they will play depends on the type of bankruptcy case you file, either Chapter 7 or 13.
Chapter 7
Chapter 7 is the most common type of bankruptcy, and is often called a liquidation case. In this instance, a trustee is chosen randomly from a panel of attorneys and sometimes non-attorneys to expedite the process of selling nonexempt property and distributing any proceeds to your creditors. You will meet your bankruptcy trustee at what is called the “341 meeting of creditors”. At this meeting the trustee will go over your complete financial picture, including your income, debts, assets and claimed exemptions. They will review all of your documentation, verify it’s accuracy and ask questions to learn more about your situation and make sure your case was prepared properly.
Chapter 13
The trustee will be much more involved should you file a Chapter 13, which is sometimes called debt reorganization. You will still meet the trustee for the first time at your 341 meeting of creditors, and you will be asked about your finances in detail, including any nonexempt assets. However, the trustee is not able to seize any assets or property to pay creditors. He or she will review all of the documentation as well as your proposed plan for repayment. They will assess the plan, and determine if it has a high probability of being repaid according to the terms stated. Once your case is approved, the Chapter 13 trustee will collect your payments on a regular basis, and may even offer some financial management tips and counseling during the process.
A Referee
It can be intimidating entering into bankruptcy, but the trustee is not an enemy who wants to redistribute your possessions among your creditors. The trustee will be reasonable, follow the law and will do their best to be fair to both sides. Another important point is that as the debtor, you must be honest with the trustee. Do not attempt to hide assets, and always provide an accurate picture of your financial situation. If it is found that you have been dishonest or have not disclosed all assets, this can lead to failed (or “dismissed”) case, and even criminal prosecution.
Be Prepared
Trustees are one piece of a complex puzzle that makes up the entire bankruptcy process. It is extremely important to enter the bankruptcy process informed, and with an attorney that clearly understands State and Federal laws. The bankruptcy process can be complicated to navigate alone, but an experienced attorney will help explain all of your options so that you can make the absolute best decision for your individual situation, and are prepared to meet and deal with the trustee that has been appointed to your case.