The role of a Chapter 7 trustee

The trustee inventories assets After filing for Chapter 7 bankruptcy, everything that you own becomes part of the bankruptcy estate. The trustee is responsible for inventorying and liquidating nonexempt assets. Any funds that are raised through the sale of a car, art collection or other items will then be sent to your creditors. If a balance remains after your possessions are liquidated, it will likely be forgiven. Trustees do have some discretion as to whether they seize an asset that may be classified as nonexempt.

The trustee handles other administrative tasks Your trustee is responsible for setting up a meeting of creditors, which takes place up to six weeks after you file for protection. If necessary, the trustee will determine if the automatic stay should remain in place. The automatic stay prevents creditors from taking any action to collect a debt while your case is ongoing. Finally, whoever oversees your proceeding will need to file paperwork with the court so that the matter can be officially discharged. Filing for bankruptcy may be an ideal way to reduce or eliminate credit card, medical and other types of debt. It may also be an ideal way to postpone a repossession or foreclosure. As a general rule, creditors cannot contact you while an automatic stay is in place, which may reduce your stress level in addition to your debt levels. A Chapter 7 proceeding usually takes about four to six months to complete.