Who is the trustee in a bankruptcy proceeding?
During a bankruptcy proceeding, be it Chapter 7 or Chapter 13, there is one figure present: the trustee. In today's blog we are going to be talking about who is the trustee and what are their functions in bankruptcy.
When you file for bankruptcy, your assets become the bankruptcy estate, similar to the estate of a person who dies. As the bankruptcy estate is not a person, it will be necessary for someone, other than the debtor and the creditor, to manage this estate, and that will be the function of the trustee or fiduciary: to manage the bankruptcy estate.
The functions of the trustee will be different in each process, since not all bankruptcy processes are the same. Also, their functions will be outlined by the type of bankruptcy chapter that is filed.
In general, the trustee will account for the debtor's assets, review the creditor's claims, sell the necessary assets, distribute the proceeds among creditors, review payment plans, make objections, annotations, or changes to the payment plans, receive payments made by the debtor through the payment plans; as well as distributing the debtor's assets and payments to creditors.
The trustee is a third party in the process, who will manage the assets of the bankruptcy state in order to help both the debtor and the creditors.
The trustee receives payment directly from the bankruptcy estate. In the cases of Chapter 7, the trustee will receive a commission for the goods sold, and if there is none, then he will not receive commission. In Chapter 13 cases, the trustee will receive a percentage of the monthly payments made through the Chapter 13 payment plan.
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