"TRUSTEE" in Bankruptcy. Who is this person ? What is this person's job?

A "TRUSTEE" in Bankruptcy. Who is this person ? What is this person's job?

Any time an "individual" or a "business" files a Bankruptcy, a Trustee is appointed in that case. The United States Trustee who works for the U.S. Department of Justice appoints the Trustee in each and every case. In Chapter 11 Bankruptcies, the Debtor [person or individual filing for Bankruptcy] is the Trustee or Debtor-in-Possession. The U.S. Trustee supervises the Debtor, and if the Debtor mismanages or does not do what he/she or it is supposed to do.. the U.S. Trustee will ask the Court to appoint a Trustee in the case.

The Trustee is your best friend or your worst nightmare.

If you are an honest Debtor, and you follow all the bankruptcy rules (and some of the rules made up by Trustees,) then the Trustee is your best friend, otherwise, the Trustee is your worst nightmare in a Bankruptcy case..more so than your creditors.

One of the the Trustee's job is to collect all your "non exempt" assets, liquidate them for cash, and then  distribute the cash prorata to all your creditors after taking out his fees for administration and fees for any attorneys he may have to hire.

Another function of the Trustee is to make sure that you are Honest, and that you are following the rules of Bankruptcy.

Bankruptcy Trustees are highly intelligent and sophisticated people. So don't try to pull a fast one over them. For example, if you live in a home that is worth $500K, and you state in your bankruptcy schedules that you household goods are worth $500..you need to be prepared for an home inspection by the Trustee or one of his staff.

Likewise they will catch you if you have transferred assets before the filing of your bankruptcy. Trustee's don't do all of this stuff from the goodness of their heart. They have a great incentive in finding assets in your bankruptcy...they get a commission based on the value of the assets they are able to collect from your bankruptcy estate. All of the above relates to Chapter 7 liquidation bankruptcies.

In Chapter 13, 12 & 11, the Chapter 13 Trustee does not want of take any of your assets. All the Chapter 13 Trustee does is object to the Confirmation of the Chapter 13 Plan, and that forces you to come up with a value of your own non-exempt, transferred, or undervalued assets, and then pay that much amount through a Chapter 13, 12 or 11 Plan. If you fail to do so, the Trustee can and will ask the Court to dismiss your Bankruptcy.

The moral of the story: In Bankruptcy you are given a "fresh start" not a "head start." A discharge is granted to only the honest but unfortunate debtor. Bankruptcy is also an "equitable" process when the rights of creditors and interested parties are as important as the rights of the person or business filing for bankruptcy. It is a two-way street..give and take.

Your Bankruptcy Attorney is constantly dealing with the whims and fancies of the Court appointed Trustees to make sure that your rights are protected, and that you accomplish your goals through Bankruptcy.

Attorney Elias Leonard Dsouza concentrates his practice on Bankruptcy [Chapter 7, 13 & 11,] Foreclosure Defense, Defense of Credit Card Lawsuits, Credit Restoration, and Debt Settlement & Credit Counseling. Our office also handles complex Civil Litigation, Business & Corporate Transactions & Litigation, Employment Law, Collections, Creditor representation, Real estate transactions, Personal Injury, Family Law, Immigration, Landlord-Tenant law, Franchise Law, Tax Law and We Sue Debt Collectors under the Fair Debt Collection Practices. www.DsouzaLegal.com. 954-358-5911.