Chapter 7 Trustee Duties and Obligations

Georgia bankruptcy lawyer advises on the trustee’s role

Chapter 7 bankruptcy gives Americans struggling with debt the chance to get a fresh financial start. A key figure in this legal process is the trustee, who is appointed to oversee the administration of the bankruptcy estate. Jeff Field & Associates provides comprehensive legal support throughout bankruptcy proceedings and explains the Chapter 7 trustee’s duties and obligations to Georgia clients. From our six offices, we make sure that the people we represent have the information they need to make smart decisions about their debt relief options. 

Reviewing the bankruptcy petition

Once a bankruptcy petition is accepted, a trustee is appointed to review and verify the debtor’s financial information. From there, the trustee determines what nonexempt assets might be available for liquidation. The amount of home equity in a Chapter 7 bankruptcy can be an important factor because it might require a residence to be sold if the equity is greater than the state’s homestead exemption. 

Administering the bankruptcy estate

There are several specific elements to the trustee’s administration of the bankruptcy estate. Nonexempt property must be collected, brought into the estate and liquidated. If a lien exists upon one or more assets, the trustee might be required to challenge that lien. Should the filing party lack any nonexempt assets, the trustee will report that to the court. 

Conducting a meeting of creditors

Bankruptcy Code section 341 requires the trustee to convene a meeting of creditors who have claims against the debtor. Our firm attends these meetings and helps clients prepare for questions they are likely to be asked by the trustee. Typically, the sessions involve inquiries to confirm the accuracy of information in the filed documents. Creditors, if they choose to attend, have the chance to explain the details supporting their claims for funds from the bankruptcy estate. 

Reporting and compliance

The trustee is responsible for reporting to the court all activity relevant to the bankruptcy estate. Within 10 days of the creditors’ meeting, the trustee must let the court know if the debtor qualifies for Chapter 7 relief under the means test, which assesses a filer’s income and assets.  

Distribution of liquidation proceeds to creditors

When someone filing for bankruptcy has non-exempt assets that can be liquidated, it is the trustee who handles that process. The trustee is responsible for maximizing the return on property that is sold and for dispersing the proceeds fairly among creditors. 

Filing a tax return for the bankruptcy estate 

In a Chapter 7 proceeding, the trustee must complete a tax return for the bankruptcy estate. IRS Form 1041 is used to submit the required information to the federal government. 

Issuing a discharge of debt

Generally, a Chapter 7 bankruptcy takes between four or six months. At the conclusion of the legal process, the trustee will issue a discharge of nonexempt debts and you will begin life after Chapter 7 bankruptcy free of those obligations. 

Contact an experienced Georgia Chapter 7 bankruptcy lawyer

Jeff Field & Associates represents Georgia clients in Chapter 7 bankruptcy cases and other debt relief matters. We have offices in Athens, Douglasville, Gainesville, Lawrenceville, Marietta and Scottdale. Please call 404-381-1278 or contact us online for an appointment.