Filing for Chapter 7 bankruptcy involves liquidating your assets in order to resolve as much of your debt as possible. The court process may also involve assigning you a trustee. In order to make sure that your bankruptcy filing proceeds smoothly, you should understand exactly what a trustee does and how one can help you during bankruptcy.
What does a bankruptcy trustee do?
After you file for Chapter 7 bankruptcy, the court will appoint a trustee. The trustee’s job involves administering the case, and that includes the following responsibilities:
• Examining the bankruptcy petition
• Looking over any supporting documents
• Investigating the person filing bankruptcy
• Selling qualifying assets to help pay creditors
What type of documents will a trustee require?
Although you will not set up a payment plan for Chapter 7 bankruptcy as you would for Chapter 11, the court will still expect you to pay some of your creditors if possible. In order to establish how much you can pay, the trustee needs any documents that relay information about the state of your assets. Income verification and at least two years of tax returns are common requirements.
How does a trustee differ from a receiver?
Trustees and receivers both handle the administration of assets after a bankruptcy filing. But trustees are typically appointed during Chapter 7 or Chapter 13. Courts appoint a receiver to those filing for Chapter 11. A receiver takes over the assets and is more involved in their distribution than a receiver.
How can you make the bankruptcy process less stressful?
If you know that you are going to file for Chapter 7 bankruptcy, you can expect to have to provide supporting documents to the trustee. Having those documents ready as you file can help expedite the process and reduce the amount of time you have to stress over the bankruptcy process.