Once you and your bankruptcy attorney go through your bankruptcy petition to make sure it is accurate and you both sign your names in all the appropriate places, the Petition is then filed electronically with the Court. The second your Bankruptcy petition is filed the Court appoints a bankruptcy trustee to administer your case.
A Bankruptcy Trustee is Appointed
This occurs whether you file a Chapter 7 or Chapter 13 Bankruptcy and you will be required to attend a mandatory Court Hearing called the 341 Meeting of Creditors with this individual presiding. Prior to this Court Hearing, the Trustee will review your bankruptcy petition and supporting documentation such as paystubs, bank statements and two most recent tax returns to make sure everything in your petition is accurate. If you fail to appear at your meeting of creditors, the bankruptcy trustee will typically dismiss your bankruptcy case and you will not receive a discharge of your debts. However, they will typically allow you to continue your 341 hearing once with a good excuse and possibly even 2 times if extraordinary circumstances occur before they file to dismiss your case.
Trustees Role in a Chapter 7 Bankruptcy
In a Chapter 7 Bankruptcy, the Bankruptcy Trustee’s primary responsibility is to find and sell any of your nonexempt property to pay to your creditors. However, if you have hired a competent bankruptcy attorney and you were truthful with them you should not worry about this occurring. Your attorney should make sure that all your property you want to keep is exempt and thus not subject to sale by the Trustee. The Trustee will simply preside over your Hearing and ask you questions under oath about the information contained in your bankruptcy petition and your financial affairs. The questions typically involve verifying your employment has not changed since your petition was filed and that your assets, debts and expenses are as you listed them. They typically ask a couple of questions that look to the future, such as whether you expect an inheritance or life insurance proceeds in the next 6 months.
Trustees Role in a Chapter 13 Bankruptcy
In a Chapter 13, the bankruptcy trustee will not sell your nonexempt assets, but instead reviews your repayment plan to make sure it is feasible and that it treats all of your creditors fairly. They will also, as stated above, preside over your 341 Hearing and approximately a month later preside over a Confirmation Hearing. At this Hearing, which your attorney can usually appear for you, thus allowing you to stay at work, the Trustee will either recommend your payment plan to be approved by the Judge or recommend you amend your plan to fix any problems that they see with it. Once you have amended your plan to satisfy the problems, the Trustee will then recommend it to be confirmed by the Judge. Once the Judge signs the Order confirming the Plan, the Trustee then distributes your monthly payments to your creditors according to the terms of the plan.
If you are struggling to pay credit cards, medical bills or personal loans, not to mention your mortgage and vehicle loans, please call one of our conveniently located offices at Bond & Botes to set up a private consultation with one of our experienced attorneys.
We will analyze your situation and help you make the best decision possible to help you navigate your financial problems.
Grant McNutt is a Managing Attorney at the Bond & Botes Law Offices in Florence and Haleyville, Alabama. He holds a Bachelor of Science from the University of Alabama, and a Juris Doctorate from the Birmingham School of Law. He has been practicing Consumer Bankruptcy Law since 1999.Read his full bio here.