The Bankruptcy Trustee plays a vital role in all Chapter 7 Bankruptcy cases in Sacramento. Not be confused with the United States Trustee, the Bankruptcy Trustee is a third party appointed by the Bankruptcy Court in each Chapter 7 case.
At the start of each Chapter 7 Bankruptcy case, the Court randomly assigns a trustee from a list. The list is maintained by the United States Trustee’s office. In Sacramento, there are about 30 trustees currently on the list.
Technically, the Court only appoints trustees in Chapter 7 cases on an “interim” basis. Creditors can elect their own trustee to replace the interim trustee. However, in nearly all consumer cases, this does not happen. The Court’s appointment stands and the trustee fulfills his or her duties.
A typical Chapter 7 consumer bankruptcy case will last around four months. During that time, the Bankruptcy Trustee will perform a few important duties.
The Trustee will review a debtor’s bankruptcy paperwork. In complicated cases, the Trustee may reach out to the debtor’s attorney for more information about the case.
The most important job of the Trustee is to exam each debtor under oath. The bankruptcy code requires each debtor in a Chapter 7 bankruptcy case to be questioned under oath. This happens at the “Meeting of Creditors.” The Trustee will ask basic questions about the debtor’s case.
If a debtor’s bankruptcy estate has any assets (most consumer cases do not have any assets), the Trustee is empowered to sell un-exempt assets. The Trustee then distributes those funds to the debtor’s creditors. Careful planning will ensure that the Trustee does not sell any of your assets.
The Bankruptcy Trustee is compensated primarily in two ways. First, the Trustee receives a small portion of the filing fee. Second, the Trustee earns a percentage commission on all funds distributed to creditors.
Bankruptcy Lawyer Rick Morin can answer any questions you have about the bankruptcy process. Please call the office at (916) 333-2222 for more information about bankruptcy.