The Trustee’s Role in a Bankruptcy Case
When you file a Chapter 7 or Chapter 13 bankruptcy case, the United States Trustee’s Office, which is a division of the United States Department of Justice, will officially appoint a third party to the bankruptcy case, known as the trustee. The trustee will be assigned specifically to your case, and manage the entire bankruptcy case and the bankruptcy estate from start to finish.
If you make the decision to file for bankruptcy (either Chapter 7 or Chapter 13), there will be a formation of a bankruptcy estate, which is a separate legal entity that is composed of all of your assets and liabilities. This bankruptcy estate should contain all of your debts and all of your property and assets. The bankruptcy trustee will then be in complete control of this estate throughout the bankruptcy process.
Bankruptcy Trustee Responsibilities
The Bankruptcy Code allows the bankruptcy trustee to have several responsibilities with respect to the bankruptcy, the debtor, and the estate. The bankruptcy trustee typically has the responsibility to question the debtor regarding all aspects of their finances, ensure that all paperwork is accurate and factual, investigate the documents to prevent any type of bankruptcy fraud, and ultimately distribute all appropriate funds to creditors of the debtor.
Bankruptcy Trustee Questions
Bankruptcy trustees have a responsibility to ensure that there is no bankruptcy fraud, and that debtors are in need of the financial fresh start afforded by the bankruptcy process. In order to manage their cases, a bankruptcy trustee will typically ask questions of the debtor to ensure the accuracy of documents and testimony of the debtor. Bankruptcy fraud is where a debtor attempts to illegally obtain the benefits of the bankruptcy process without fully revealing all of their assets and debts in order to deceive the bankruptcy court. It is critical that the bankruptcy trustee ask questions and examine evidence to prevent bankruptcy fraud from occurring.
In most cases, these questions will occur in the 341 meeting of the creditors, also known as the 341 hearing. Some of the questions that a bankruptcy attorney may ask are if the debtor has filed bankruptcy previously, if the list of assets and liabilities is accurate, or if there are any legal obligations ordered by a previous court such as child support or spousal support. Chapter 7 and Chapter 11 bankruptcies are different, and therefore the responsibilities of the trustee will differ in each of those types of bankruptcy.
Let Us Help You Today
If you are considering filing for either Chapter 7 or Chapter 13 bankruptcy, you will have to have difficult and important conversations with a bankruptcy trustee regarding your assets and debts. Make sure that you have legal representation during these conversations to ensure that your legal rights are protected. Contact an experienced West Palm Beach bankruptcy attorney today at Kelley, Fulton & Kaplan at 561-264-6850 for a free consultation, and to help you understand how best to answer a bankruptcy trustee’s questions.