A Stafford bankruptcy lawyer will tell you that in almost all bankruptcy cases, a trustee usually has no assets to liquidate. A trustee is the temporary owner of the debtor’s asset when such debtor files for bankruptcy. He is appointed by the court to administer, liquidate a debtor’s assets and use the proceeds thereof to pay off the unsecured creditors. Such cases are known as ‘no assets’ cases. However, should a trustee recover some asset later, he will liquidate the asset to offset the debtors commitments to creditors.
Your Stafford bankruptcy lawyer will have to cooperate with the bankruptcy trustee. A bankruptcy trustee has 4 major roles.
Bankruptcy Documents and Petition Verification and Review
When a debtor files for bankruptcy, he usually gives a schedule of all his assets, both liquid and solid assets. He also gives a schedule of all his current incomes, expected incomes and debts owed. A financial position statement of his business, his creditors, and taxes owed are also delivered to the court. Copies of each of these documents are sent to the Trustee. It is the role of the trustee to verify the authenticity of the documents, the veracity of his financial position in relation to the creditors and whether the petition is valid or not. All this is done before the court decides whether to offer the protection the business is seeking under the Texan law. Of course your Stafford Bankruptcy lawyer will have gone through the documents and ascertained that you need the protection. Note that in this case, the trustee is able to classify your assets into exempt and nonexempt assets. He is also able to determine the secured and unsecured creditors. The secured creditors will be the first to benefit from the liquidation of the business’ assets.
The 341(a) Meeting
This is a meeting that seeks to get the information from the filer of the petition. Your Stafford Bankruptcy lawyer will have prepped you enough about the questions you can expect at the meeting. You take an oath and then the trustee will ask you about the contents of the petition you have filed. Most creditors will not attend this meeting unless they think you are hiding some of your assets.
Non Exempt Assets Liquidation
This involves selling of the property that is not protected under the bankruptcy law in Texas. A trustee is obligated by the law to seek the best buyer for the assets. This ensures that the creditors get the maximum benefit from the nonexempt assets. However, in most cases, the trustee finds that all assets are exempt. In such cases, he will prepare a report stating that he found no exempt property to liquidate and distribute the proceeds thereof to the creditors.
Cutting special interest payments
Most businessmen have their preferred creditors. These people might be family members or business friends. Before filing a bankruptcy petition, they will be tempted to pay off their preferred creditors. The trustee has authority to get back these monies and redistribute it to all creditors. In other cases, a businessman becomes mischievous by transferring some of the assets to other people in a bid to avoid losing all the assets. A trustee has the power to get the assets back and liquidate it in order to distribute to all the creditors equitably and fairly. Of course if you have already hired a Stafford bankruptcy lawyer, he will advise you as much.
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