How an Attorney Can Help You With a Bankruptcy Trustee

As of November 2010, the number of bankruptcies fell by 13.3% from those previously filed in October. According to the American Bankruptcy Institute, a non-profit research group, this number is still 2.2% higher than those recorded in November 2009. Many people file bankruptcy at the beginning of the year, once they receive their credit card bills after splurging over the holidays. People may choose to file bankruptcy if they are being squeezed by large amounts of unsecured debts. The high cost of medical care has left millions of Americans with expensive hospital and doctor bills because their private insurance failed to cover the entire amount. When you file for bankruptcy, most of your unsecured debts will be discharged and a trustee will be put in charge of your assets. For those who are not familiar the process, they may be wondering what does a bankruptcy trustee do?

The Bankruptcy Trustee’s Conflicting Role

While the trustee is supposed to be working with the debtor on their bankruptcy case, they are actually working for the creditors. The primary responsibility of a bankruptcy trustee is to obtain money to pay the creditors in addition to performing the following duties:

• Investigate the assets of the debtor and liquidate them to pay off debts in a Chapter 7 proceeding
• In Chapter 12 and 13 reorganization cases, the trustee will oversee the repayment plan
• Attend the meeting with the creditors, usually called the “341 meeting”
• To ensure that the debtor complies with federal bankruptcy rules and is not being deceitful by hiding assets

Any non-exempt property can be sold, such as houses, cars, art objects, jewelry and other valuable items if necessary. Keep in mind that the trustee receives commissions when selling the debtor’s property.

Should You Trust the Trustee?

There are often cases where a trustees actions or decisions may be deemed inappropriate by either the debtor or creditor. Both entities can appeal these questionable decisions if they believe it violates federal bankruptcy rules. A bankruptcy attorney can help you with the trustee by:

• Making sure that the trustee provides all documents pertaining to the case, such as receipts for property sold or bills of sale.

• Assist you in keeping the trustee from a trust fund that the debtor oversees. Assets of a trust fund automatically become part of the bankruptcy estate. Depending upon the terms, the trustee may have the power in revoking or terminating the trust, thereby allowing the trustee access to these funds. An attorney may be able to add an addendum modifying the terms of the trust.

In addition, an attorney will help ensure that your case is handled in an expedient manner. Some trustees have been guilty of dragging the proceedings out in order to obtain more fees for their services.

Bankruptcy Attorney vs. Trustee

If you are having trouble with the trustee assigned to your case, immediately contact a bankruptcy attorney. Lawyers who specialize in bankruptcy law know the rules inside and out. When a trustee objects to an exemption that should be allowed, your legal counsel can step in and set them straight. Attorneys have the ability to question any recommendations that are made by the trustee.