After a consumer files for bankruptcy, a trustee will be assigned to oversee the matter. This person has a variety of roles and responsibilities to both the debtor and its creditors, and the exact role a trustee plays depends on the type of protection a person seeks. For instance, those who file for Chapter 7 bankruptcy may have some or all of their non-exempt assets liquidated.
Therefore, the trustee would be responsible for determining which assets are not exempt from liquidation, selling them and giving money to creditors. In a Chapter 7 case, a trustee might also need to handle creditor claims or object to an attempt to discharge a debt. This person’s role is slightly different in a Chapter 13 proceeding because an individual is less likely to lose assets. As with a liquidation bankruptcy, the trustee in a Chapter 13 case could be called upon to handle claims or complaints made by a debtor or creditor.
Furthermore, the trustee is expected to accept or challenge a debtor’s proposed Chapter 13 payment plan. The person appointed to oversee the matter is also responsible for collecting payments each month and sending money to creditors. Individuals may be able to learn more about what a trustee does by consulting with a bankruptcy attorney.
There may be several benefits to seeking Chapter 7 or Chapter 13 bankruptcy protection. In most cases, a debtor will be entitled to an automatic stay of creditor contact, which means that lawsuits, repossessions and foreclosures will likely be postponed. Those who file for Chapter 13 bankruptcy may be entitled to an auto loan cramdown or to strip a lien on a home loan. This may reduce what is owed to a lender, which may make it easier to make timely payments.