When you file for bankruptcy you are assigned a bankruptcy trustee. This person will be involved in your bankruptcy case from start to finish. They participate by attending the creditors meeting and they will handle your debts going forward.
The trustee has a completely different job depending on what chapter of bankruptcy you file. This is due to the major differences in the final result of filing chapter 7 or chapter 13 bankruptcy.
Chapter 7 bankruptcy is often associated with the term, liquidation. That is because during the chapter 7 process any assets that you have will be liquidated and the proceeds from this is used to make payments to your creditors. Once your assets are liquidated you will then be discharged of your remaining debt.
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The role of the bankruptcy trustee in chapter 7 is to liquidate the assets. The trustee then uses the money from the liquidation to make payments to creditors, pay themselves and then pay a portion to the debtor.
Chapter 13 bankruptcy is very different and has a very different outcome then chapter 7. Those filing chapter 7 have to qualify to do so by showing that their income is low enough. Those who do not meet these requirements file chapter 13. You may also file chapter 13 bankruptcy if you have a steady income and want to keep you assets.
In order to complete chapter 13 you have to make modified payments toward your debts for between 3 and 5 years. Once these debt payments are determined and approved by your trustee you will begin making the payments directly to your trustee. It is the responsibility to the trustee to distribute these payments to the creditors and to take a percentage as their payment. Upon completion of the agreed upon payment schedule the debtor will be then be discharged of the remaining debt.
If you are considering filing bankruptcy contact a qualified attorney. They will help you to determine the best form of bankruptcy for your situation.
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