When you file for bankruptcy, the court will appoint a “bankruptcy trustee,” who are private individuals (or corporations) with various powers and obligations based on the circumstances of each case. Essentially, the trustee oversees the bankruptcy process and your “bankruptcy estate” – which is comprised of your property. 

In Chapter 7Chapter 13, or even Chapter 11 bankruptcy, the trustee will review your bankruptcy paperwork, as well as investigate and verify your financial information to ensure you do not have a fraudulent claim. Furthermore, your trustee will meet with your creditors, collect your assets, convert your property into cash, and distribute the profits to your creditors. 

The following is a breakdown of the trustee’s role in each type of bankruptcy: 

  • Chapter 7 bankruptcy – The main role of the trustee is to sell your nonexempt property and quickly repay your creditors, determine if you can sell your nonexempt property in order to overcome a substantial amount of your debt, challenge the claims of creditors (if necessary), and object to a bankruptcy discharge (if grounds exist). 

  • Chapter 13 bankruptcy – In Chapter 13, the trustee must oversee your repayment plan by ensuring you can afford to keep up with the payments, collect your payments based on your plan, and distribute your payments to creditors. Additionally, your trustee will review your claims, the creditors’ claims, and challenge other aspects of the bankruptcy case. 

  • Chapter 11 bankruptcy – Commonly known as “reorganization” bankruptcy specifically for businesses who wish to continue operating, Chapter 11 filed by large corporations does not typically involve a trustee. Instead, you (the debtor) run your businesses and perform the functions of the trustee. On the other hand, a trustee may be appointed if a small business owner files for bankruptcy. 

Keep in mind, the bankruptcy trustee works on behalf of the bankruptcy court – and does not represent you in any way. To ensure your needs are met and your rights are protected, it is important to hire an experienced bankruptcy lawyer. 

If you are interested in filing for bankruptcy in Harrisburg, PA, contact Dethlefs Pykosh & Murphy today at (717) 559-0271 today to let us examine your finances. We offer flat-fee rates and payment plans with no hidden costs! 

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