The law recognizes several situations in which a person has control of the assets that belong to a person or legal entity but does not personally own those assets. For example, the personal representative of a deceased person’s estate must authorize or initiate all transactions by the estate, but the estate, not the personal representative, owns the assets; the estate may pay the personal representative a salary, and it is possible to name the personal representative of your estate as a beneficiary of your will.
Likewise, the trustee of a trust is the only person who has the right to disburse funds from the trust, even though the assets belong to the trust and will eventually belong to its beneficiaries. Likewise, during a bankruptcy case, the bankruptcy trustee has partial or total control of the debtor’s assets until the bankruptcy case concludes. To find out more about how the bankruptcy trustee will behave in your bankruptcy case, contact an Oakland Chapter 7 bankruptcy lawyer.
The Role of Trustees in Chapter 7 and Chapter 11 Bankruptcy Cases
In a Chapter 7 bankruptcy case, the debtor can be an individual or a basis. At the beginning of the bankruptcy case, the debtor signs over their non-exempt assets to the bankruptcy estate. The trustee may transfer the assets to the creditors or sell the assets and pay the proceeds to the creditors. The trustee can also request the transfer to the bankruptcy estate of assets that are not titled in your name but which the court believes truly belong to you.
One of your most important tasks in a Chapter 7 personal bankruptcy case is ensuring that the court lets you keep all eligible assets, such as your house and your car. If the trustee sees that you are hiding assets, they can persuade the court to dismiss your bankruptcy filing, leaving you responsible for all your debts.
Chapter 11 bankruptcy is another type of bankruptcy available to businesses. The bankruptcy trustee fulfills a similar function in these cases as the trustee’s role in Chapter 7 cases, except that there is no liquidation of the business but rather a restructuring in which the trustee has a say.
The Role of Trustees in Chapter 13 Bankruptcy Cases
Chapter 13 bankruptcy cases are a desirable option for individual debtors who can afford them because they do not require you to transfer most of your property to the bankruptcy estate, keeping only the bare necessities. You still keep your assets, but the bankruptcy trustee keeps a close eye on your transactions to make sure that you are not hiding money or making frivolous purchases that might undermine your ability to stick to your court-ordered debt repayment plan. If the bankruptcy trustee catches you up to no good, the court can dismiss your case or convert it to Chapter 7.
Contact the Law Office of Melanie Tavare About Keeping the Bankruptcy Trustee at Bay
A debt relief lawyer can help you get maximum debt relief and minimal interference from your bankruptcy trustee. Contact the Law Office of Melanie Tavare in Oakland, California, or call (510)255-4646 for a case evaluation.
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