The Chapter 7 Bankruptcy Trustees: Who They Are and What They Do In Your Case.

Edrie Pfeiffer
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Edrie Pfeiffer, Bankruptcy & Divorce Attorney

When you file for Chapter 7 bankruptcy, there are a lot of people who become involved in the case. One is your Chapter 7 trustee. The Trustee is an impartial person from the Hampton Roads area who has been appointed by the Executive Office of the United States Trustee, which is a branch of the United States Department of Justice. The trustee is not, however, a government employee. They are usually local lawyers—although they don’t have to be attorneys—who are charged with administering your case and liquidating (selling) your nonexempt assets.

The main job of the Chapter 7 trustee is to look at all of the debtor's assets and then liquidate them in such a way that provides funds that can be used to pay a portion of the debtor's unsecured debts. The trustee wants to get the most money possible from the debtor's property. in the majority of cases, all of your assets can be protected or exempted and the trustee will not be able to sell those assets.

After the case is filed, the trustee will hold a meeting, called the meeting of creditors. This is also referred to as the 341 hearing. While it is called the meeting of creditors, in most cases, no creditor actually attends. Instead, it is a time for the trustee to question the debtor about their assets. The debtor must attend the meeting and must answer questions about his or her finances and property. The trustee will attempt to find any asset that the debtor has or may be entitled to that can be used to help pay something to the unsecured creditors. Another role the trustee has is to determine if they feel the case is being filed fraudulently. If the trustee believes it is, they will report that to the court.

In most cases, the 341 hearing is the only hearing the debtor will have to attend and a discharge will be granted approximately three months later.

Remember that your trustee is neither for you nor against you. They are assigned to your case to make sure you qualify for Chapter 7, and to ensure that your assets are divided properly and sold for the highest price possible. They want the case to run smoothly and quickly, just like you do.

If you are thinking about filing for Chapter 7 bankruptcy in Virginia Beach, contact Hampton Roads Legal Services at 757-276-6555 for a free consultation.