Bankruptcy

What does a chapter 7 trustee do in my case?

By David Leibowitz, Illinois and Wisconsin Bankruptcy

Debtors are frequently scared of chapter 7 trustees.  They don’t have to be. The general idea of bankruptcy is pretty simple.

An honest debtor gets a discharge in bankruptcy.  The price of a discharge in bankruptcy is that the non-exempt assets of a debtor may be sold (liquidated) and the proceeds distributed to creditors.

In order for the bankruptcy process to work smoothly, both the debtor and the trustee must fulfill their obligations.  We’ll talk about your obligations as a debtor in a future article.  For the moment, let’s consider the things a chapter 7 trustee must do in your case.

In chapter 7 cases, the bankruptcy trustee has the obligation to the following 12 things:

(1) collect and reduce to money the your non-exempt property and close the case as soon as possible

(2) be accountable for all property received

(3) make sure that you perform your intention to reaffirm debts

(4) investigate your finances

(5) check out proofs of claims in your case and object if necessary

(6) oppose your discharge if you’ve given reason for such action

(7) provide information about your case to others unless a court forbids this action

(8) report to the court about the operations of any business operated by the Trustee

(9) provide interim and final accounts

(10) give two notices to holders of any claim for alimony or child support

(11) deal with ERISA qualified plans for businesses in bankruptcy

(12) deal with patient records in health care bankruptcy cases

Full post as published by Bankruptcy Law Network on February 10, 2010 (boomark / email).