Bankruptcy trustees play a vital role in bankruptcy cases, helping a creditor negotiate outstanding debts with their debtors and overseeing the process to ensure everything goes smoothly.
Whether you're filing for a Chapter 7 or a Chapter 13 bankruptcy, understanding the trustee's role in your case is vital.
To schedule a consultation with one of our attorneys, contact us online or via phone at (423) 299-4489.
Chapter 7 Vs. Chapter 13 Bankruptcy
First, let's quickly recap the differences between Chapter 7 and Chapter 13 bankruptcy:
- In a Chapter 7 bankruptcy, a creditor who passes an economic means test has the opportunity to liquidate nonexempt assets to repay debtors.
- In a Chapter 13 bankruptcy, a creditor who fails to pass a means test has the opportunity to negotiate new repayment plans with their debtors.
No matter which type of bankruptcy a person files for, certain expenses (such as child support) cannot be paused or voided. At the end of a bankruptcy, negotiable debts should be reduced to zero, and the person filing for bankruptcy should ideally obtain a fresh financial start.
Trustees in Chapter 7 Vs. Chapter 13 Bankruptcy
Trustees tend to serve a fundamentally different purpose in Chapter 7 and Chapter 13 bankruptcies:
- In a Chapter 7 bankruptcy, the trustee identifies nonexempt assets and works with the creditor and debtors to liquidate said assets to repay outstanding debts. The trustee also oversees the creditors meeting and ensures the proper steps are carried out to finalize the bankruptcy.
- In a Chapter 13 bankruptcy, the trustee works with the creditor and debtors to establish a repayment plan for outstanding debts. They also ensure the creditor adheres to the repayment plan.
An experienced lawyer can help you learn more about what to expect from your bankruptcy case. At Conner & Roberts, PLLC, we're happy to help you do just that.
To schedule a consultation with our team, contact us online or via phone at (423) 299-4489.