Responsibilities of a Chapter 13 Trustee

Also known as a “wage earner’s plan,” Chapter 13 bankruptcy is beneficial in some situations. For this bankruptcy filing, you are required to have regular income. In addition, you must come up with a plan for repaying your creditors. If the financial plan is approved, you are given between three and five years to pay back a portion or all of the debt.

Although the court-appointed trustee is there to help you through the process, you may first want to contact a reputable Herkimer bankruptcy lawyer to determine if debt consolidation, credit counseling, or even a Chapter 7 bankruptcy is an additional or better option. If not, your bankruptcy attorney can assist with the Chapter 13.

Before bankruptcy filing with the courts, you must meet with a trustee. This meeting is designed to accomplish two things. First, the trustee will review financial documentation that you provided to confirm that you are not committing fraud. Second, the trustee needs to determine if the bankruptcy is feasible. If there is no way for you to meet the obligations outlined in the financial plan or if fraud is suspected, there is no reason in moving forward.

Ultimately, the trustee provides services beneficial to you and your creditors to make sure that everything is fair across the board. Because the Chapter 13 bankruptcy process can be intimidating and overwhelming, this is the perfect opportunity to talk to a trusted Herkimer bankruptcy lawyer for legal assistance.

It is common for disputes between debtors and creditors to arise, which is why the trustee mediates. Because this individual is an unbiased party, meaning the trustee can talk to you and your creditors while being fair to both, compromises can be recommended. The goal is to find a compromise since this reduces that amount of issues that go through the court system. As such, you avoid wasting money and time.

The way that the repayment plan works is that you pay the trustee, who then pays your creditors. In overseeing the Chapter 13 bankruptcy process, the trustee makes sure that payments are being made in full and on time while ensuring that the creditors are receiving what is due. To accomplish this goal, it is the trustee’s responsibility to make sure that you follow the rules by not selling off assets, refinancing loans, or incurring new debt after the bankruptcy filing.

Just as the trustee is there to benefit the creditors, this person works to help you achieve success. Therefore, if some unexpected expense arises during the three- to five-year payoff period, you need to be upfront with the trustee.

Perhaps your car broke down, you had some serious health problems that required hospitalization, or you needed home repairs. If something like this comes up, the situation will be reviewed by the trustee to help you make the right decision that will not cause a problem for your case.

Instead of panicking when facing a financial disaster, talk to a qualified Herkimer bankruptcy lawyer. An attorney can answer any questions you have and offer sound advice for dealing with the court and the trustee.

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