The Role of the Bankruptcy Trustee
The bankruptcy attorneys at Grainger Legal Services can help individuals throughout Alabama protect their interests during financial reorganization. Working with a bankruptcy trustee can help you make sure you receive the greatest possible discharge of your consumer debts. Most states are part of the U.S. trustee program in the Department of Justice, but Alabama is one of two states that are not part of this program. In this state, a bankruptcy administrator oversees bankruptcy cases, maintains a panel of private trustees, and monitors the course of the case.
The bankruptcy administrator performs some similar tasks to those performed by trustees in the states that use the U.S. trustee program. The administrator supervises the trustees' work. However, private trustees take on substantial duties in making sure that your case is moving forward smoothly and that your creditors are paid back to the extent possible.
Initiating a bankruptcy case creates an "estate," which temporarily becomes the owner of your property. The primary role of the trustee is to liquidate those assets in the estate that are nonexempt in order to maximize the return to your unsecured creditors.
When all of your assets are exempt in Alabama or subject to valid creditor liens, the bankruptcy trustee will file a report stating there are no assets, and there will be no distribution of the bankruptcy estate to any of the unsecured creditors. However, if you do have assets that are not exempt, your unsecured creditors will file claims with the court. The trustee will try to sell the nonexempt assets so that the proceeds from the sales can be distributed to as many of your creditors as possible according to their claims.
Trustees also have "avoiding powers." This includes the authority to set aside any preferential transfers you made to creditors 90 days before filing for bankruptcy. For example, you may have tried to pay back a relative before filing for bankruptcy. The trustee may set this aside. The trustee can also undo security interests and certain other transfers of property.
If you are a renter, a bankruptcy trustee will determine whether you can continue with your lease or rental agreement. In many situations, the trustee allows the debtor to keep the lease. However, if you are paying an exorbitant rent and there are more affordable rentals, a trustee can terminate your lease and require you to find a more affordable living situation. It is rare for a Chapter 7 Trustee to get involved in leases.Role of a Chapter 13 Bankruptcy Trustee
In a Chapter 13 case, the bankruptcy trustee is responsible for collecting the payments you make as part of your debt repayment program. You make the payments on a monthly basis (or based upon how often you get paid) over a period of three to five years. The trustee then disburses the monthly payment to your creditors in accordance with the terms of your Chapter 13 debt repayment plan. The trustee also assists debtors with their repayment plans, takes legal action in certain situations, and keeps the bankruptcy administrator apprised of what is happening in your case.Consult a Montgomery Attorney for Advice on Your Bankruptcy Case
A bankruptcy trustee in Alabama can have a significant impact on how much of your property you keep, and the kinds of changes you will need to make to your life as a result of reorganizing your finances. An experienced bankruptcy lawyer at Grainger Legal Services can work with a trustee in South-Central Alabama to make sure you receive the greatest possible discharge and your other interests are protected. We represent clients from our offices located in Prattville, Troy, and Montgomery. Call us at (334) 260-0500 or contact us online to schedule a free initial consultation.