If you are considering filing for bankruptcy in California, you will hear the term “bankruptcy trustee” come up early in the conversation. Many people are unsure what a trustee actually does or how much authority they have over the process. At Law Offices of Terrence Fantauzzi, we believe informed clients make better decisions, so here are answers to some of the most common questions we hear about bankruptcy trustees.
What is a bankruptcy trustee?
A bankruptcy trustee is a court-appointed official who is assigned to oversee your bankruptcy case. They are not a judge, and they do not work for you — their role is to represent the interests of your creditors and ensure that the bankruptcy process follows federal law. Trustees are typically attorneys or financial professionals with experience in bankruptcy proceedings.
How is a trustee assigned to my case?
When you file for bankruptcy, the court automatically assigns a trustee to your case. You do not choose your trustee, and in most cases, you will not have ongoing contact with them beyond the required 341 meeting of creditors. The trustee assigned will depend on the district in which you file and the chapter under which your case proceeds.
What does a trustee do in a Chapter 7 case?
In a Chapter 7 bankruptcy, the trustee’s primary job is to review your petition and financial disclosures for accuracy and completeness. They will also assess whether you own any non-exempt assets that can be liquidated to pay your creditors. If you have assets that are not protected under California’s exemption laws, the trustee has the authority to sell them and distribute the proceeds.
In the majority of Chapter 7 cases, however, filers have few or no non-exempt assets. These are called no-asset cases, and in them, the trustee simply confirms the accuracy of the filing and moves the case toward discharge.
What does a trustee do in a Chapter 13 case?
In a Chapter 13 bankruptcy, the trustee plays a different role. Rather than looking for assets to liquidate, the Chapter 13 trustee reviews your proposed repayment plan to make sure it meets legal requirements and is fair to your creditors. Once the court approves your plan, the trustee collects your monthly payments and distributes the funds to your creditors according to the plan’s terms. They will oversee this process for the entire three-to-five-year duration of your repayment plan.
What happens at the 341 meeting with the trustee?
The 341 meeting, also called the meeting of creditors, is your one required in-person interaction with the trustee. During this brief hearing, the trustee will ask you to confirm your identity and verify that the information in your petition is accurate. They may ask questions about specific assets, income sources, or recent financial transactions. The meeting typically lasts only a few minutes. Your attorney will prepare you for what to expect and will be present with you.
Can the trustee deny my discharge?
Yes, in some circumstances. If the trustee discovers that you have provided inaccurate information, concealed assets, or failed to comply with the requirements of your case, they can object to your discharge. This is one of the most important reasons to work with an experienced attorney and to be fully transparent throughout the process.
Speak With a Bankruptcy Attorney Today
Understanding who is involved in your bankruptcy case is an important part of feeling prepared. Law Offices of Terrence Fantauzzi is here to answer your questions and guide you through every step of the process. Call (909) 552-1238 to speak with an experienced bankruptcy attorney today.
