Bankruptcy & the Role of the Chapter 7 Trustee

Bankruptcy & the Role of the Chapter 7 Trustee

Each year, approximately 800,000 people file for bankruptcy in order to pay off their creditors and alleviate their debts. For many Americans, this legal process represents a life-changing second chance at establishing financial stability.

Chapter 7, the “liquidation bankruptcy,” is the most popular bankruptcy option because it completely discharges your debts in a 4-6-month period. The court assigns a trustee to administer your case, liquify your assets, and ensure the integrity of the bankruptcy process. While trustees are not government employees, they are assigned and overseen by the Department of Justice.

A trustee has many responsibilities, including:

  • Evaluating your bankruptcy petition
  • Ensuring your paperwork is completed accurately
  • Verifying your financial calculations
  • Filing objections to claims of exemption
  • Selling your property
  • Distributing funds to creditors

Many debtors make the mistake of assuming their trustee is a legal ally. This is not so. Your trustee is, first and foremost, a representative of your creditors. In fact, your trustee even receives a fee for liquidating your assets. Only a bankruptcy lawyer can be trusted to have your back when your financial stability is on the line.

Protecting Your Assets

A trustee has the authority to liquidate all your nonexempt property in a Chapter 7 case. In other words, your property is sold off to repay your creditors. Fortunately, the U.S. Bankruptcy Code allows you to exempt certain assets from your liquefiable estate so long as they are deemed essential to your career or financial recovery.

Exemptions include:

  • Personal property exemptions
  • Homestead exemptions
  • Automobile exemptions
  • Wildcard exemptions

A qualified bankruptcy attorney can review your assets and help you file a schedule of exempt property with the court. If you don’t have any nonexempt property available, the trustee will be forced to declare your bankruptcy a “no asset case.” Your debts will be discharged even if your creditors don’t receive any money.

Review Your Case with an Experienced Legal Professional

Bankruptcy can be a confusing and difficult legal process for the uninitiated. It’s all too easy for an inexperienced debtor to make a costly mistake that jeopardizes their entire case. In a worst-case scenario, that mistake might even land them in hot legal water.

At The Virga Law Firm, P.A., we can effectively guide you through each step of this complex, multifaceted legal process. Our experienced bankruptcy attorneys can meticulously evaluate your financial situation and represent your best interests throughout the duration of your case. We don’t want to just help you complete Chapter 7, we want to see you enjoy a future free of financial anxieties and debt-related hardships.

Contact The Virga Law Firm, P.A. at (800) 822-5170 to schedule a consultation.