What Does A Bankruptcy Trustee Do?
Once you file bankruptcy a court appointed bankruptcy trustee will oversee your case. The new law also requires that the bankruptcy petitioner to take a debtor education course and receive credit counseling from a U.S. Trustee approved non profit credit counseling agency.
United States Trustees supervise the administration of the following cases filed under the Federal Bankruptcy Code:
Liquidation proceedings under Chapter 7 bankruptcy - Those assets that are not exempt from creditors are collected and liquidated (reduced to money). The proceeds are distributed to creditors by a private trustee appointed to administer the debtor's estate under Chapter 7.
"Wage-earner" reorganization proceedings under Chapter 13 - Chapter 13 bankruptcy, is used primarily by individual consumers to reorganize their financial affairs under a repayment plan that must be completed within three to five years. A "standing trustee" appointed by the United States Trustee typically serves as a trustee of the U.S. Bankruptcy Court where the case was filed.
Specific responsibilities of the United States Trustees include:
Appointing and supervising private trustees who administer Chapter 7, 12 and 13 bankruptcy estates (and serving as trustees in such cases where private trustees are unable or unwilling to serve).
Taking legal action to enforce the requirements of the Bankruptcy Code and to prevent fraud and abuse.
Referring matters for investigation and criminal prosecution when appropriate.
Ensuring that bankruptcy - estates are administered promptly and efficiently, and that professional fees are reasonable.
Appointing and convening creditors' committees in Chapter 11 business reorganization cases.
Reviewing disclosure statements and applications for the retention of professionals.
Advocating matters relating to the Bankruptcy Code and rules of procedure in court.
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