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Bankruptcy trustees handle many aspects of Chapter 7

| Jun 4, 2019 | Chapter 7 Bankruptcy

When working toward debt relief, Oklahoma residents will have a number of people involved in their cases. Filing for Chapter 7 bankruptcy is a significant step, and in order to complete the process successfully, individuals taking this route will need to work with bankruptcy trustees. These parties have a vital role in handling aspects of these cases.

After a petition for Chapter 7 is filed, a trustee is randomly assigned to a case. This is an unbiased party who will have no personal stake in the outcomes of the bankruptcy case. The trustee will review the bankruptcy petition and other related documents to ensure that the information is correct, and he or she will also look for any signs of fraud. Ensuring the correctness of the information could prevent issues later.

Additionally, because Chapter 7 is liquidation bankruptcy, the trustee has the responsibility of collecting any non-exempt assets for auction. The trustee will then take the proceeds and distribute the funds to the applicable creditors in order of priority. In the event that the trustee believes that a petitioner fraudulently transferred funds in efforts to keep them out of creditors’ reach, the trustee could work to have those funds returned.

As this information shows, a bankruptcy trustee will play a significant role in any Chapter 7 case. Of course, working with the trustee should not intimidate Oklahoma residents hoping to find debt relief through bankruptcy. This role is simply part of the overall process. Plus, concerned parties can work with their legal counsel to make sure they understand how trustees will act as part of their cases and to better understand the necessity of this position.