Many Tennessee residents turn to bankruptcy for debt relief. Although each type of bankruptcy is different in certain aspects, all have one thing in common: they utilize the services of a trustee. A trustee is a person appointed in every bankruptcy case to help oversee the estate and ensure that the process is being carried out appropriately. So what exactly does a trustee do in a Chapter 7 bankruptcy, in which everything is liquidated?
The duties of a trustee vary depending on the case, but for the most part, he or she oversees the person’s estate. An estate consists of the person’s non-exempt property. The trustee is typically in charge of getting all the property together – houses, cars, other vehicles, collectibles, artwork and anything else of value. Any property that has resale value property is then sold and the trustee distributes the proceeds to creditors. If necessary, the trustee also challenges claims from creditors and can even object to a bankruptcy discharge.
Other types of bankruptcies, such as Chapter 13, do not require the liquidation of assets. Chapter 13 bankruptcy focuses on a repayment plan, which must be carefully monitored by the trustee. The trustee also makes sure payments are collected and distributed.
The duties of the trustee are different for other types of bankruptcy because the processes are different. In addition, each Chapter 7 case is different because of the debtor’s unique situation and the number of creditors involved. In every type of bankruptcy, however, the trustee is responsible for allowing or denying claims against the estate and moving everything along expediently.
Source: FindLaw, “What is a Trustee in Bankruptcy?,” accessed July 25, 2015