Bankruptcy Trustee:
Chapter 7
The trustee in a chapter 7 bankruptcy is usually appointed.
You meet with the trustee about thirty days after the
filing of your bankruptcy petition. The main objective the
trustee has is to sell any property you have and pay
creditors off with the proceeds. This is all your
non-exempt property which means all the stuff that can be
sold to satisfy your debts. Also all money received within
six months after filing bankruptcy is the property of the
trustee. For example, any money received from inheritances,
property division from divorces or lawsuits are all fair
game. The trustee gets a commission for any assets he or
she finds. The trustee can also recover transfers and
payments that you made before filing bankruptcy.
The trustee reviews your petition and asks you some
questions to determine if there is property to sell to pay
off some creditors. Her or she can ask questions regarding
equity in your home, jewelry, art, and other personal
possessions. To drive the point home, it is basically
non-exempt property. At the end of the day, most assets are
usually exempt anyway, otherwise, you would file a chapter
13 instead to protect your assets. For example, you list
your car on your petition with a value of $8,000.00. Your
state allows a $2,500.00 exemption on an automobile, and
you still owe $1,000.00 to pay it off. That means after you
deduct the $1,000.00 loan and the $2,500.00 exeption, you
have $4,500.00 equity in your car which is non-exempt.
Therefore, the trustee can liquidate (sell) the auto to
obtain the $4,500.00 and distribute this money to your
creditors. Any assets not pursued by the trustee is yours
after your bankruptcy is closed.