When it comes to bankruptcy, the rules are found in the Bankruptcy Code. The moment a debtor becomes bankruptcy by filing their case, an impartial person must be appointed by the court to represent the collective interests of creditors and to control and administer the bankruptcy estate. That person is called a TRUSTEE. Thus, in my bankruptcy alphabet, T is for Trustee.
The duties of a trustee in a Chapter 7 bankruptcy case are set forth in 11 U.S.C. §704. Every person that files bankruptcy under Chapter 7 will meet their assigned trustee. Their principle function is to liquidate and distribute the estate; otherwise known as “take your stuff; turn it into cash; and distribute the money to your creditors.” If there are no assets to take, the trustee still has other work to perform.
Generally, before your §341(a) Meeting of Creditors, the trustee has investigated your financial affairs, reviewed your petition, schedules and statement of financial affairs. At the hearing, the trustee will examine each debtor under oath and verify their identity, along with the information they provided with their petition.
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