A chapter 7 bankruptcy proceeding is a complicated and dynamic legal proceeding. There are many moving pieces. There are creditors, assets, bankruptcy trustees, liquidations, exemptions and a lot of other terms and rules that the average person entering chapter 7 bankruptcy is not familiar with. Add the stress that naturally comes with a bankruptcy to the confusion and it can be overwhelming.
Let’s take a look at one aspect of the process, the role of the bankruptcy trustee. The bankruptcy trustee is an important element of the proceeding and understanding their role will help you to better understand the whole chapter 7 process.
The Role of the Bankruptcy Trustee
When you file for chapter 7 bankruptcy, you give the court information about your debts, creditors and assets. The goal of the bankruptcy proceeding is to liquidate (sell) your assets and use the proceed to pay off your debts. The court then discharges you from further obligation on that debt.
The bankruptcy trustee is appointed by U.S Trustee to review your information. The bankruptcy trustee is charged with establishing that the information you provided to the court is accurate and free of error.
About a month or so after you file for bankruptcy, you must attend a hearing before the bankruptcy trustee with your attorney. This hearing is known as 341(a) meeting of creditors because any of your creditors are also free to come and ask you questions during the hearing.
The bankruptcy trustee’s job is to conduct the hearing. The bankruptcy trustee will ask you questions while you are under oath about the information contained in your bankruptcy petition.
Liquidation of Non Exempt Assets
Once the document filing and 314(a) hearing are completed, the role of the bankruptcy trustee is to oversee the liquidation of assets and the distribution of money to creditors. The bankruptcy trustee determines the value and exemption status of assets and sells these assets to pay off your creditors. If there are no non-exempt assets, the bankruptcy trustee will draft a report that states that there are no assets that can be liquidated and distributed.
If there are assets to liquidate, the trustee oversees the sale. Upon liquidation of all nonexempt assets, it is then the bankruptcy trustee’s job to determine which creditors get what and ensure that the funds are distributed according to the priorities listed in the U.S. bankruptcy code
Bankruptcy Law with Kalicki Collier of Reno
Filing for chapter 7 bankruptcy can be a complicated process. And filing for bankruptcy alone can render you incredibly vulnerable. You need an adviser who will be by your side from filing to discharge. The bankruptcy law team at Kalicki Collier Reno Law Firm has the experience and knowledge to help you navigate the bankruptcy proceedings. We will make sure that you are treated fairly and equitably within the bankruptcy laws of Nevada.
We understand that the bankruptcy process can be stressful and difficult. But we also believe that bankruptcy, as difficult as it is, is the beginning of a better financial future for you and your family. Let us help you step back into financial control. Contact us today.