Section 704 of the Bankruptcy Code outlines the duties of a Chapter 7 trustee. A chapter 7 trustee’s primary role is to administer the Chapter 7 Bankruptcy case. This means that once assigned a Chapter 7 case by the US Trustee’s Office, a Chapter 7 trustee must review the schedules, question the debtor at a 341 meeting, and generally make sure debtor’s schedules are verified by debtor themselves.
A Chapter 7 trustee’s job entails reducing to money non-exempt assets of the case, voiding fraudulent transfers, and recouping preferential payments made by debtors to creditors. They must be accountable for the money that is taken in and also be responsible for disbursing the monies to creditors, pro rata, and based on a priority system.
The US Trustee’s Office requires all Chapter 7 trustee’s to secure a trustee’s bond to insure the estate that the estate will be compensated should trustee’s actions cause the estate a loss. While a trustee technically has 2 years to administer the assets of the estate, the vast majority of cases get closed out much sooner than this. In fact, the vast majority of Chapter 7 Bankruptcy cases are no-asset cases and get closed within weeks of receiving debtor’s discharge.
If debtor has numerous non-exempt assets, the estate may remain open for as long as 2 years, and even sometimes longer, with permission from the bankruptcy court, to fully administer the assets of the estate.
Most Chapter 7 Trustees are supervised by an attorney at the US Department of Justice. Chapter 7 trustees serve one year terms and must be have their appointments renewed yearly.
CONCLUSION
When the time is right, or when you are ready, reach out to Minnesota’s HIGHEST GOOGLE REVIEWED bankruptcy law firm at www.kainscott.com. You will be so happy you did!
