No matter whether the economy is doing well or in a recession, people can be financially hurting. All it takes is the loss of an income for a short period to send someone into a tailspin. Individuals have debt and live paycheck to paycheck, which can be a recipe for disaster. For some people who have lost their job, bankruptcy is a great option. If you're considering filing for bankruptcy, call the Lowell Bankruptcy Lawyers at Marcotte Law Firm for a free consultation.
Who is the Bankruptcy "Trustee"A trustee is usually the individual who oversees the maintenance and administration of a trust. However, in this case, the Trustee is the court appointed individual who reviews the debtor's bankruptcy petition and assets. They are always experienced practicing attorneys who are hired per case by the Federal Bankruptcy Court. They handle hundreds of cases at a time.
Their purpose is two-fold (1) to keep the debtor honest, and (2) to collect money on behalf of the debtor's creditors. They are not there for the benefit of the debtor. That's why it's important to have a competent Bankruptcy Lawyer by your side.
They Keep the Debtor HonestUnfortunately, some debtors are not always forthright and honest about what assets they have. In both a Chapter 7 and Chapter 13 case, the assets that the debtor holds are important. In the Chapter 7, any asset that is not exempt is reachable by the Trustee. In a Chapter 13 case, the total assets may dictate how much the debtor has to pay back to their creditors over three to five years.
Sometimes, a debtor will be foolish and will transfer property to a close friend or relative prior to filing as to hide it from the creditors or Trustee. This is a big problem for the debtor. Debtors often think they are being smart and novel, but the truth is - if you are trying to hide something, the Trustee has already seen someone try to hide an asset in the exact same way.
The Trustee keeps the debtor honest through the 341 Hearing. The Section 341 hearing is an interview of the debtor conducted by the Trustee under oath. It is an opportunity for the Trustee to ask about items listed or absent from the petition. The Trustee has always looked into the debtor to see if property has been transferred prior to filing. This is an opportunity for the Trustee to get the debtor to answer under the pains and penalties of perjury as to why something was not included in the petition.
Most of the time something was not listed as an honest mistake by the debtor or their attorney. In that case, the Trustee will request an amended petition be filed. In times where the debtor has tried to conceal an asset of value, the Trustee might institute an adversary proceeding. Not to mention, the debtor might face criminal consequences if they intentionally lied on their petition.
the Trustee may try to Collect or Seize AssetsA Trustee will often institute an adversary proceeding to "claw back" a transfer. A "claw back" proceeding allows for the court to undo fraudulent transfers that occur within two years of filing.
Now the Trustee still needs to prove the transfer happened within two years and certain other conditions, but it is one way the Trustee can obtain assets that were concealed or inappropriately transferred. If the Trustee is successful in their adversary proceeding, they will pay themselves out of the proceeds and distribute the remaining money or assets to the creditors of the debtor.
Lowell Bankruptcy LawyerBankruptcy Trustees are usually highly respected members of the bankruptcy law community and they know the Bankruptcy Code inside and out. They are generally pleasant to deal with, but they can make a debtor's life a nightmare if they believe the debtor is up to something fishy. You need a qualified and experienced Lowell Bankruptcy attorney to help you navigate all these areas and potential pitfalls. Call us today for a free consultation at (978) 458-1229.