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What Role does a Trustee play in your Bankruptcy Case?

Posted on in Bankruptcy

According to the United States Department of Justice website, the United States Trustee Program “seeks to promote the efficiency and protect the integrity of the Federal bankruptcy system”. Basically, the trustee's job is to oversee the bankruptcy process, detect and eliminate fraud, and ensure that all involved parties abide by the law.

You can find the trustee who is assigned to your case in a Chapter 7, Chapter 12, or Chapter 13 bankruptcy case at the top of your case docket. If you suspect bankruptcy fraud, report it to your trustee. An experienced Illinois bankruptcy attorney can help you work with and understand the trustee who is assigned to your case.

If you and your attorney have decided that filing for Chapter 7 bankruptcy is your best option, all of your non-exempt assets will be liquidated in order to pay your debts before you can be excused from repayment (discharged) of eligible debts. These assets are collected and liquidated and then distributed to creditors by a private trustee. Certain assets are exempt from this process in the state of Illinois, this chart can help you get an idea of what some of these are. Your Illinois bankruptcy lawyer can help you understand what will happen to your belongings in your bankruptcy case.

During the process of Chapter 11 bankruptcy, debts are reorganized while the business continues to operate. All or a portion of debts will be repaid by the business. The repayment schedule is usually created by the debtor and their attorney and then agreed to by the creditor. Chapter 11 bankruptcy filers are required to pay quarterly fees to the U.S. Trustee Program. Your bankruptcy lawyer can help you negotiate your repayment schedule, which affects these quarterly fees.

A trustee will help determine if an individual filer is eligible for chapter 7 bankruptcy or chapter 13 bankruptcy. Chapter 13 is a process that reorganizes an individual's debts to be repaid within 3-5 years. The U.S. Department of justice website states that “A 'standing trustee'… typically serves as the trustee of the debtor's estate pending fulfillment of the debtor's repayment obligations under a plan confirmed by the U.S. Bankruptcy Court where the case was filed.”

Although the trustee will help you through your bankruptcy case, the trustee is employed by the U.S. Department of Justice. They are not a neutral party; the trustee is there to make sure that all laws are followed, and may not have your best interests at heart. A caring, experienced Illinois bankruptcy lawyer will be on your side and can advise you on the best actions for your bankruptcy case.

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