The Role of the Trustee in Your Bankruptcy Case

One player in the world of consumer bankruptcy that most ordinary Americans have never heard of is the bankruptcy trustee. Bankruptcy trustees are privately contracted individuals employed by the US Department of Justice. Trustees are not required to be lawyers (although many are), but they are required to be very well-versed in bankruptcy law. When you file a petition for chapter 7 or chapter 13 bankruptcy, your case will automatically be assigned a trustee. This trustee is sometimes referred to as an "interim trustee" although in the vast majority of bankruptcy proceedings the initially assigned trustee serves for the duration of the case. The role that the trustee takes in your case will differ depending on the kind of bankruptcy you have filed. In a chapter 7 bankruptcy, the trustee's main role is to liquidate the debtor's assets that are not exempted by Maryland law and to distribute the money obtained from the sale amongst the creditors. Asset chapter 7 are unusual in the context of consumer bankruptcy and your attorney should prepare you for this situation. In a chapter 13 bankruptcy, the trustee has a longer term role because he or she is responsible for receiving and distributing the payments that the debtor makes under the repayment plan. The chapter 13 trustee also has the power to initiate a modification of the original repayment plan at any time during the period in which the debtor is making payments. In both types of bankruptcy, the trustee is also responsible for making sure that the bankruptcy petition and supporting documents have been completed in compliance with the federal bankruptcy code. The trustee will often request additional information from either you personally or from your attorney. One of the advantages of hiring an experienced Maryland bankruptcy lawyer lies in the lawyer's knowledge of what the trustee will require.

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