A bankruptcy trustee is a court-appointed officer assigned to administer the debtor’s estate and charged to do so impartially. Trustees are appointed by the United States Department of Justice. A trustee represents the creditors and is in charge of protecting their interest.
The Role of the Trustee
The chapter of bankruptcy under which the debtor files determines the role and duties of the trustee, and his/her level of involvement. The trustee’s job encompasses collection of estate property, making court appearances, objecting to and contesting discharges and exemptions which the debtor claims, liquidating estate property that is non-exempt and distributing the proceeds to the creditors.
A discharge in bankruptcy is a release granted to a debtor from liability to pay certain specific kinds of debts. With a discharge the debtor has an irrevocable order which prohibits creditors from taking steps of any kind to collect on those discharged debts. Such steps include communicating with the debtor through personal contact, letters and telephone calls, and preventing a debtor from initiating legal action for recovery.
The Case does not End a Genuine Lien
Even though for discharged debts a debtor avoids personal liability, a valid lien which is not rendered unenforceable during the bankruptcy proceedings will continue even after the case. This allows a secured debtor to enforce the lien to reclaim the property which the lien secures.
The time when the discharge is granted will vary according to the chapter of the bankruptcy filing. For example, in a chapter 7 bankruptcy proceeding which involves liquidation, the court generally approves the discharge immediately after the time allowed for filing objections to the discharge and the permitted time to file a motion of dismissal of the case for significant abuse (exactly 60 days after the assigned date for the 341 meeting of creditors). Generally this happens about 4 months after the debtor files the petition for bankruptcy with the court.
About 4 Years
In achapter 13 bankruptcy, which covers debts of a debtor with steady income, the discharge is generally granted at the earliest opportunity after the individual makes all the payments, according to the listing and schedule of the plan. Because with chapter 13, the repayment plan could last from between 3 and 5 years, the discharge could occur somewhere around 4 years after date the petition was filed.
Exemptions to the Learning Material
The automatic stay which prevents debt collection institutions and other creditors from seeking remuneration from a debtor has several exclusions, child support being one of them. What this means is that if you are the custodial spouse and have been trying to collect child support from your ex-spouse, filing for bankruptcy by your ex-spouse does not provide protection from paying child support. This applies to support bills that are overdue as well. So you do not need to panic or become too worried. Your ex-spouse is still on the hook.
When reorganizing after filing for bankruptcy, the debtor’s financial affairs can become quite messy and complex. Nonetheless, the law awards the highest priority to child support payments. This means that child support payments take precedence over any other creditor obligations such as medical bills, credit cards, and payday loans. But in order to ensure that child support payments are made properly and when due, the receiving spouse might be compelled to work with a bankruptcy attorney.
If Chapter 13 bankruptcy is what the debtor has filed then chances are that how he or she arranges payments of total debt will become an essential condition of the reorganization plan. Simply put, if the debtor does not meet both past due payments and future payments according to the court-approved plan, then bankruptcy could be nullified and other payments imposed.
What happens in a situation where a debtor is due more than one set of child support payment obligations or if he or she has other creditor claims which are equally critical? The answer depends on the specific details of each case and how state laws view it in terms of precedence and application. If you have concerns regarding the ability of your ex-spouse to adhere to a schedule of child support payments after a bankruptcy then speak to your attorney to protect yourself and make sure that payments are enforced.
If a child support lawsuit is being decided simultaneously with a bankruptcy filing, things could become quite complicated. Typically courts go out of their way to secure the welfare of a child or children who are the victims of parental disputes, but the system if not foolproof. Make certain that you have a clear understanding of the contractual obligations of both parents in the arrangement for child support.
Do Not Let them Walk Away from This
Make a study of the bankruptcy provisions which relate to your specific case enable you to talk to your attorney. Ensure that your ex-spouse is forced to pay remuneration in a situation where he/she fails to comply with the Chapter 13 or Chapter 7 plan.
Though we are informed that we are in recovery mode from the economic depression that just past but is actually still in existence according to many, the end is yet to appear. The recession continues and if you look at the unemployment rates, America does not have too much to smile about. Many individuals who have lived frugally and maintained careful control of their finances still find themselves facing mounting debt which they are unable to cope with.
A Tough Decision to Make
Many Americans continue to face tough choices, the ultimate being personal bankruptcy. This is a feasible option to people overwhelmed with credit card debts, unpaid medical bills, car loans, and who are behind in their mortgage payments. If you feel this is the only solution that will bring you out of the morass in which you are in, then consult a bankruptcy attorney to know which bankruptcy is best for you.
Chapter 7 bankruptcy is one choice you have which over a million Americans file every year. This option can be availed of by any individual or couple provided you pass a “means test”. This simple test determines whether you meet the criteria required by law in terms of your total debt amount, family size, assets, and income.
No Financial Aspects Hidden
Your bankruptcy attorney will brief you on the requirements and prepare the necessary documentation that has to be filed. There are certain set procedures to be followed which are difficult for a layperson to become familiar with. The risk with a DIY bankruptcy is that if the proper procedures are not followed or conditions met, the court could well turn down your application. Much like the means test, all the procedures and documentation are required to give the court a clearer idea of your financial status and whether you qualify for bankruptcy.
Getting the Monkey Off of Your Back
A huge benefit when you file your application is that you acquire an automatic stay from debt collection. This means that debt collection agencies can no longer make calls or threats towards your person and/or property. They can neither enforce collection efforts nor can they file a lawsuit for collection. This relieves the debtor of a significant amount of stress.
Goodbye Flat Screen
Bankruptcy provides additional relief by discharging most of the debtor’s debts. Some debts such as spousal support, child support, and alimony continue, as do certain types of taxes. However, most of the tangible assets the debtor owns are taken away by the court-appointed trustee for liquidation. The money obtained from the sale of these assets is used to pay off creditors, at least in part.
Filing for personal bankruptcy is not a black mark on the applicant nor is it a sign of failure. It is certainly not a badge of honor though. Most Americans are forced to file as a last resort because of circumstances beyond control.
Consumer Credit Counseling and What it Is
Federal law under the 2005 Bankruptcy Abuse and Prevention of Corruption Act requires every debtor filing for bankruptcy to undergo a credit counseling course from an approved non-profit agency prior to filing the bankruptcy application. But many debtors are confused about what exactly is consumer credit counseling.
Laying Out a Plan
Credit counseling is a course conducted by experts providing consumers in debt with guidance in getting out of debt and keeping out. In certain cases and if the situation demands it, credit counselors negotiate with creditors on behalf of a debtor to create a feasible debt management plan which the client can follow. If followed properly the plan established by the counselor will enable a consumer to pay off all his or her debts over a period of time. The plan also envisages reduced payments or some other concessions by the creditors like writing off late fees and lowering the interest rate on the balance.
Better than Nothing
Most creditors are receptive to such plans because at least they recover the bulk of the money owing to them within a predictable period of time. If the debtor filed for bankruptcy an automatic stay would kick in preventing the creditor from making any further attempts at debt collection. Furthermore, the creditor might be presented with a situation where he/she will receive only part of the payment through the sale of some of the debtor’s unsecured assets by the trustee. The rest of the debt might be discharged in its entirety.
Solving a Debt Problem