Will The Bankruptcy Trustee Visit My Home And Take My Property?
In a bankruptcy case, a bankruptcy trustee represents all of the creditors. The trustee has a duty to treat all creditors fairly, but also has a duty to fight for and on behalf of those creditors. That means that in some sense, the trustee has an adversarial position against you, as the debtor. The trustee’s job is to find any non-exempt assets that you have, sell them, and distribute the proceeds to the creditors.
The trustee also is charged with making sure you aren’t concealing assets, or misrepresenting anything in your bankruptcy paperwork. At your 341 meeting of creditors, the trustee will be the one asking you questions, in order to ensure that there is no property the trustee could potentially take.
Visiting Your Home
You know that you will see the trustee at your 341 meeting. But what about outside of the 341 meeting? There are stories of bankruptcy trustees showing up to people’s houses unexpectedly, without warning, in efforts to find other property the debtor has, that perhaps the debtor didn’t disclose on the bankruptcy paperwork.
Or, the trustee just wants to verify the accuracy of what you disclosed on your paperwork, and believes that a surprise visit to your house would be the best way to do that.
When Would a Trustee Visit?
Situations where a trustee visits a debtor’s house are very rare—in reality, a trustee usually doesn’t need to make a personal unannounced visit, to verify the accuracy of your bankruptcy paperwork. Additionally, the trustee has thousands of cases—it is impossible for him or her to be visiting every debtor personally.
A trustee may want to visit your home, if there is suspicion of fraud. Another reason may be to verify the value of any property that you listed, that the trustee suspects is over or undervalued.
For example, if you claim that your car is worth less than what it should be worth because it is broken down, the trustee may pay a visit to ensure that it is, in fact, broken down. Anything that sparks a trustee’s curiosity can lead to a visit—this often happens when an angry ex-spouse or jilted business partner calls the trustee to “report” an unscrupulous debtor.
Visits Have to be Announced
The good news is that even if trustee visits are rare, unannounced, surprised visits are even rarer. Many courts have even said that an unannounced, surprise visit is illegal, as it prevents the debtor from being able to have his or her attorney present. The trustee’s visit will be coordinated through your bankruptcy attorney (or you, individually, if you are not represented).
The visit may be from the trustee him or herself, but may also be through an agent of the trustee. Additionally, even if the trustee finds something that could be taken, your property will not be taken right there, at the home visit. You will have the chance to fight any effort by the trustee to take property found at the home visit.