Bankruptcy is a legal process to ensure the satisfaction of debt and the ability of entities to continue their livelihood. There are four main sides to any bankruptcy case: debtor(s), creditor(s), trustee, and the court. Each side adds an equivalent part to bring on a whole speedy process to the case.  Click on the informative Understanding Bankruptcy graph below for an explanation of terms.

CREDITOR:
Definition
Garnishment
Liens
Mortgages
DEBTOR:
Definition
Rights and Duties
Protection
TRUSTEE:
Definition
Bankruptcy Trustee
Qualifications
Duties
THE COURT:
Definition
Official Forms
Bankruptcy Types

Bankruptcy Trustee

The bankruptcy codes calls for an independent party to administer assets of the debtor. The bankruptcy Reform Act of 1978 established the United States Trustee Program, USTP, to become the watch dog of the bankruptcy process. In addition, the USTP is meant to promote efficiency and integrity in addition to enforcing the United States bankruptcy laws. Depending on the case, the role of the trustee changes:


Chapter 7 – the trustee is in-charge of liquidation proceedings, including all assets that are not exempt from creditors and collected for liquidation. The trustee administers the distribution of funds;

  • Chapter 11 – the trustee is part of court controlling arm to supervise and direct the reorganization proceedings. Depending on the court ruling, the trustee maybe appointed to become part of the administrative staff or as an auditor or both;

  • Chapter 13 – the trustee administers a debt repayment plan where debtors make payments towards a generalized plan approved by the court. Debtors owe duty to fully update their income standings with the trustee as payment amount is based on income level.

 

How will Chapter 7 affect my life?
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Government Bankruptcy Resources


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What Documents Do I Need To File For Bankruptcy?


We want your bankruptcy to go as smoothly as possible. See what documents you should have prepared.  Read more