You likely want your Rockland County bankruptcy declaration to be as private as possible, with little to no outside involvement, and understandably so. With that, you may only want your attorney to know the details of your financial state and the status of your ongoing case. However, you may be unable to avoid the inevitable intervention of a federally appointed bankruptcy trustee, whom you will interact with through the course of your bankruptcy case. Please follow along to find out the role of a bankruptcy trustee and how a proficient Rockland County bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq., P.C. can help you prepare for your future relationship dynamic with one.
What Does a Bankruptcy Trustee Do?
It’s necessary to understand that, regardless of which consumer bankruptcy chapter you file in Rockland County, you will have to work with a bankruptcy trustee. In some instances, however, business bankruptcy may not require a trustee.
While the duties of a trustee will vary depending on what chapter you file, the primary responsibility of this individual is to oversee the bankruptcy process to ensure that your case is in compliance with the U.S. Bankruptcy Code.
Trustee Duties in Chapter 7 Bankruptcy
Chapter 7 Bankruptcy involves the liquidation of non-exempt property to repay creditors. As such, they are responsible for:
- Identifying non-exempt assets
- Tracking down improperly transferred property and bringing it back to your bankruptcy estate (lookback period)
- Liquidating assets to repay creditors
- Attending hearings and meetings
Trustee Duties in Chapter 13 Bankruptcy
The Chapter 13 Bankruptcy process essentially reorganizes your debts into monthly payments that will span the course of three to five years. During this process, your trustee is responsible for:
- Monitoring your compliance with the repayment plan
- Collecting and distributing payments among creditors
- Requesting plan modifications if necessary
Trustee Duties in Chapter 11 Bankruptcy
Chapter 11 Bankruptcy, like Chapter 13, is a reorganization plan. However, the difference is that Chapter 11 allows businesses and those with debts that exceed the limit set in Chapter 13 the opportunity to seek relief. However, this process is much more complex and expensive than Chapter 13.
As a Chapter 11 filer is considered a “debtor in possession,” a trustee may not always be required for this process. In the event a trustee is appointed, they are responsible for managing property and the implementation of a repayment plan in accordance with Chapter 11 requirements.
What a Trustee Does Not Do
Though bankruptcy trustees play a considerable role in your case, it’s critical to understand the limitations:
- They are not your lawyer
- They cannot offer legal advice
- They do not represent your best interests
- They represent the best interests of the creditors and your bankruptcy estate
How Trustees Are Appointed and Paid
There is no way around having a bankruptcy trustee as part of your Chapter 7 or Chapter 13 consumer bankruptcy proceedings.
Appointment Process
The United States Trustee program, part of the Department of Justice, may assign an individual to this role after you submit your bankruptcy petition. You cannot appoint a trustee of your own choosing for this process.
Trustee Compensation
It’s important to understand that trustees are paid for their services. As such, they are compensated through:
- Fees based on liquidation percentages for Chapter 7, OR
- Nominal base fees for Chapter 7
- Included in repayment terms and capped by federal law for Chapter 13
How to Prepare to Work With a Trustee in Rockland County
Though a trustee will not navigate your bankruptcy case with your best interests in mind, it’s important to understand that there are steps you can take to keep the process smooth and effective as your case proceeds through the U.S Bankruptcy Court for the Southern District of New York.
Be Transparent
First and foremost, it’s important to understand that trustees are responsible for closely reviewing and monitoring your assets, income, and transfers. As such, ensuring you fully comply with the financial disclosure requirements is critical, as it can:
- Prevent delays in your case
- Avoid allegations of hidden assets and fraud
- Protect your eligibility to seek a discharge
Understand Non-Exempt Property
Familiarizing yourself with non-exempt assets is critical prior to filing for bankruptcy. This allows you to prepare for the possibility of liquidation. Common, non-exempt assets include:
- Second homes
- Vehicles with equity
- Investments (excluding retirement accounts)
- Luxury goods and valuable personal property
Organize Documentation
Bankruptcy is an incredibly document-heavy process, which is why it’s in your best interest to compile and organize the following documents so they are ready upon request:
- Tax returns
- Paystubs or proof of income
- Asset valuation records
- Bank statements
- Property transfer records
Work With a Rockland County Bankruptcy Attorney Today
Going through bankruptcy can be an overwhelming and tedious process. That’s why it’s in your best interest to connect with a Rockland County bankruptcy attorney from The Law Offices of Allen A. Kolber, Esq., P.C. Our team is proud to represent those in Suffern, Nyack, and the surrounding areas who receive the financial fresh start they deserve. If you’re ready to begin this process, contact our firm today to schedule a free consultation with a member of our team.
