In all forms of bankruptcy, a bankruptcy trustee typically oversees the bankruptcy filing. Below we discuss what a bankruptcy trustee oversees specifically in a Chapter 13 bankruptcy filing. It’s always advised that when you file for Chapter 13 bankruptcy that you work with a bankruptcy attorney like a phoenix chapter 13 bankruptcy lawyer.
Role of the Bankruptcy Trustee in Chapter 13
During a Chapter 13 bankruptcy, an impartial bankruptcy trustee is appointed in order to administer and oversee the bankruptcy case. During this case, which can last from 3 to 5 years, the Chapter 13 bankruptcy trustee ensures that your suggested repayment plan complies with bankruptcy laws and then administers the plan once it has been approved by the court.
When a debtor files for Chapter 13 bankruptcy, he or she files a set of bankruptcy documents with the court that includes information about income, monthly expenses, assets, and debts. The repayment plan is based off those documents. The Chapter 13 trustee will review a debtor’s entire bankruptcy petition (including all the financial statements and information) and the proposed repayment plan. The trustee reviews all this information to ensure income calculations are accurate and that expenses are reasonable, and that the proposed Chapter 13 repayment plan is fair to all creditors.
After the initial review, debtors are asked to attend a meeting of creditors. The trustee conducts the hearing and asks a debtor questions under oath regarding the information contained in the bankruptcy documents.
Payments Sent to Trustee
Within 30 days of filing a Chapter 13 bankruptcy, a debtor must begin sending payments according to the proposed repayment plan. These payments are sent to the bankruptcy trustee who then distributes the funds to creditors in accordance with the terms of the approved repayment plan. If the repayment plan has not been accepted by the bankruptcy court, a debtor must still begin sending payments within 30 days. The trustee will hold the funds in a trust for creditors while the repayment plan is being finalized.
A trustee will continue to pay the creditors with the money he or she receives from the debtor until the debt is paid off completely. This can take three to five years. During this time, the trustee keeps an account of all monies received and allocated.
Working with a Bankruptcy Attorney
Bankruptcy can be an overwhelming process. That’s why we advise that you work with a phoenix chapter 13 bankruptcy lawyer that is familiar with various debt repayment options. We are committed to helping our clients understand their rights and options under the bankruptcy law and developing the debt relief solution that makes the most sense for each individual. We invite you to call (602) 648-3274 or contact our Arizona office to schedule a free initial consultation.
AZBK Lawyers 668 N. 44th St., Ste 320, Phoenix, AZ 85008 (602) 648-3274