When a person falls on hard times and considers filing for chapter 7 in Lawrence, KS, they may not know much about the bankruptcy process. While it’s important to consult a lawyer with questions and concerns, learning about bankruptcy is helpful. Below, potential clients will learn several important things about bankruptcy trustees and their role in the process.
The Trustee’s Job Is to Review the Case
To initiate bankruptcy proceedings, a client must file papers with the appropriate court. These documents are known as a bankruptcy petition, and they include vital details about the client’s finances and the basis for the claim. Once the papers are filed, the court appoints a trustee to review them. The trustee will review income statements, tax returns, and other documents to ensure the petition accurately reflects the client’s financial position.
Trustees Manage Property
Once a person files for bankruptcy, their property is under the jurisdiction of the state’s bankruptcy court. Known as the bankruptcy estate, the property stays in the client’s possession until the trustee decides how to dispose of it.
Conducting the Creditors’ Meeting
Under the Bankruptcy Code, trustees must conduct hearings where they question the client under oath. This is known as a creditors’ meeting, and it usually takes place up to 45 days after the initial filing. During the hearing, debtors must answer trustees’ questions or face charges of perjury. Creditors may also ask questions, but they seldom attend these meetings.
Liquidating Non-Exempt Assets
Chapter 7 in Lawrence, KS allows those at financial risk to stop further collection attempts. In return, debtors allow the court and the trustee to take control of their assets. Then, it’s the trustee’s job to determine how much those assets are worth, and, if necessary, sell them to repay creditors.
Administering and Reviewing the Repayment Plan
Unlike chapter 7, chapter 13 bankruptcies don’t involve asset liquidation. Rather, the debtor and the creditors enter a repayment plan that allows them to gradually repay their debts. When one files a Chapter 13 repayment plan, it’s the trustee’s responsibility to review the plan. Under the plan’s terms, the debtor must make monthly payments to the court-appointed trustee, who will distribute the funds to creditors.
Bankruptcy is stressful, even under the best of circumstances; however, with the right legal help, debtors can make it through the process relatively unscathed. For more information or to schedule a consultation, call Joe Wittman.