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The Trustee’s Job in Your Bankruptcy Case

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If you’re considering filing for bankruptcy in Alabama, it’s helpful to know how the process works, so that you will know what to expect and how best to be prepared. One important component of any Alabama bankruptcy case is the role of the trustee. Learn how a trustee affects your bankruptcy case, below.

The U.S. Bankruptcy Administrator oversees your case

A bankruptcy filing in Alabama is handled a little differently than in most other states. Alabama is one of only two states that uses the US Bankruptcy Administrator program to oversee its bankruptcies. A bankruptcy administrator performs the role that a bankruptcy trustee would in most other states. The administrator also uses its own panel of private trustees to carry out its oversight role.

The job of the administrator and trustees

Essentially, the bankruptcy administrator and trustees want to make sure that petitioners follow the rules of the court when seeking bankruptcy, and that creditors are paid fairly before debts are forgiven. The administrator’s office will review your petition, check for any evidence of fraud or illegal transfers in your bankruptcy filing, and request additional evidence or documents as needed. The administrator will also oversee the meeting of the creditors, a brief hearing where your creditors have the opportunity to ask you questions about your bankruptcy filing under oath.

Liquidation duties in a Chapter 7 case

In a Chapter 7 bankruptcy case, trustees are often given the job of liquidating a debtor’s property. Chapter 7 bankruptcy petitioners are offered a certain number of property exemptions which protect items of the debtor’s property from being used to pay off creditors. Many Chapter 7 debtors don’t have any property that isn’t covered by an exemption, so they don’t lose any property by filing for bankruptcy. If they do have non-exempt assets, the trustee will determine whether it is worthwhile to sell the property and distribute the proceeds to the creditors.

Chapter 13 payment plan review and administration

In a Chapter 13 bankruptcy case, the trustee will review your proposed payment plan, suggest possible changes to the plan, and offer a recommendation to the judge regarding whether it should be approved. The trustee will also collect your payments each month and distribute them to your creditors according to the plan.

If you are an Alabama resident facing an increasing amount of credit card or medical debt and need help getting back on a healthy financial track, contact the dedicated and trustworthy Montgomery bankruptcy lawyers at the Dansby Law Firm for a consultation, at 334-834-7001.

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