Posted on 02,13,2013
Bankruptcy case trustees play an important role in both maximizing repayment to creditors and protecting debtors from unfair claims. When a debtor enters into Chapter 7 bankruptcy, a case trustee will be assigned to oversee the liquidation of certain types of property owned by the debtor. In Chapter 7 bankruptcy cases—which allows individuals to have many of their debts discharged—the debtor is legally entitled to keep certain assets (known as exempt assets). Other assets (known as non-exempt assets), however, must be surrendered to the trustee. The case trustee then oversees the liquidation—or selling—of those assets or the debtor's interests in those assets. The funds from the liquidation are used to pay the necessary expenses and then to pay back certain creditors, a process that the trustee also oversees. In Chapter 13 cases, involve repayment plans instead of immediate debt discharge, the trustee is responsible for collecting regular payments from the debtor and distributing those funds to the appropriate creditors.