What is the role of the personal bankruptcy trustee?

When a Mississippi resident attempts to resolve significant financial challenges, they may look to bankruptcy as a solution. Filing for personal bankruptcy can help a resident eliminate or re-structure debt in such a manner that a new financial beginning is truly possible. However, the bankruptcy process can be complicated whether a person is filing for Chapter 7 or Chapter 13, and an attorney's guidance is usually welcomed by those seeking to file.

One term that many who file will encounter is the bankruptcy trustee. A U.S. trustee is a person who is tasked with overseeing the administration of not only various bankruptcy cases but also trustees and estates. This individual serves under the Justice Department and also monitors plans, fee applications and creditors' committees. A U.S. trustee may also perform other duties dictated by statute.

A trustee is one who often works under the U.S. trustee's direct supervision and represents the bankruptcy estate. This individual may be a private individual or a corporation and has statutory powers that may be exercised to benefit unsecured creditors. The trustee is appointed in all Chapter 7 and Chapter 13 bankruptcy cases, the two types of individual bankruptcy a Southaven resident is likely to file. In addition, they are appointed in Chapter 12 cases and some cases falling under Chapter 11.

What are the various responsibilities of a trustee? A trustee reviews the petition of the debtor as well as their schedules. The trustee can also bring action against either the debtor or the creditors in order to recover the estate's property. In a Chapter 13 bankruptcy case, a trustee will oversee the repayment plan, receive payments and disburse that money to creditors. In a Chapter 7 bankruptcy case, the trustee will liquidate the estate's property and distribute the funds to creditors.

Source: uscourts.gov, "Bankruptcy Basics Glossary," accessed June 21, 2015

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