bankruptcy trustee

Who is a Trustee?
In every case of filing for bankruptcy, an impartial trustee is appointed by the courts. The primary role of the trustee is to act as a representative of the creditor. The role of the trustee and the degree of involvement changes with different types of bankruptcy plans. Although, representative of the creditors, the trustees also have the responsibility to ensure that the debtor’s plan runs as smoothly as possible.
How Does the Trustee Work?

There are various ways in which a trustee goes about carrying out his main objective of protecting the interest of the creditor. For example, a trustee can collect property of the estate, object to discharge or certain exemptions a debtor may claim, liquidate nonexempt property in the estate and distribute the funds to appropriate creditors. Te trustee is appointed by the United State Trustee, an officer of the Department of Justice.

Let’s now look at the two types of bankruptcy filing and the roles the trustee plays therein:
Chapter 7: In a Chapter 7 Bankruptcy filing, the role of the trustee is limited. In most Chapter 7 cases, the debtor would not have any assets available, but in cases where there are assets, the trustee is responsible for the liquidation and distribution of money to the creditors. The trustee will check up on the bankruptcy, look at exemptions, schedules, and ensure that the debtor is sticking to the plan of action laid out by the court. The trustee also participates in creditor meetings, and oversees the process of selling assets. The trustee has the power to deny a discharge to the debtor if any evidence of fraud, perjury, or ineligibility is discovered.

The United States Trustee appoints every Chapter 7 trustee to a panel for a period of one year (renewable).
Chapter 13: No doubt, in a Chapter 13 filing the trustee’s role is not just of an overseer, and is much more involved. Ordinarily, there will be one trustee handling all Chapter 13 work in a particular district or area. There is of course no liquidation involved in a Chapter 13 case so the trustee’s responsibility is to manage the financial affairs of the debtor, in a way that facilitates paying back some of all of the credit. The trustee must be present at all hearings that concern property valuation, must ensure receipt of payments from the debtor and also the disbursal of money to the respective creditors.

The United States Trustee appoints a “standing trustee” to administer cases in a specific geographic area.
Chapter 11: The job of a trustee in a Chapter 11 case is multi-layered. The responsibilities include setting up official committees (usually up to 15 people) to serve a case and choosing members for the same; reviewing all reorganization plans submitted to ensure the information provided is adequate and accurate; ensure that deadlines are met; investigating any case of fraud, or abusive conduct and refer the case to the appropriate department.

In all cases, the United States Trustee oversees (at the minimum) the following functions of the panel/“standing” trustees:

* Administration of individual debtor estates
* Financial record-keeping
* Impose necessary requirements to ensure that fiduciary duties are carried out

The Balancing Act
It’s a literal tight rope walk. On the one hand is the responsibility to keep the creditors interests in mind, and on the other is to provide assistance in the smooth performance of the debtor’s plan. How can a debtor be sure whether a trustee is keeping a close watch on your activity to help in times of need, or to collect as much money as possible? There is no knowing really, and it’s a tough call that you might want to avoid taking. Leave this to the discernment and experienced eye of your attorney to judge. Keeping in mind the tendencies of a particular trustee, your attorney will help you structure the best possible scenario for your bankruptcy plan.


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Home Equity and Bankruptcy

Using Home Equity to Get Out of Bankruptcy
Once you take your time and look around for the alternatives that you have when you are faced with bankruptcy, you will find that there are a number of things you can do to make your situation better. Sometimes people cannot avoid filing for bankruptcy, but there it is possible to fix things up quicker once you have filed for bankruptcy.

The Chapter 13 Bankruptcy gives you the option of repaying the outstanding amount of your debt over a period of about three to five years. The good news here is that if you have equity on your house, then it is possible to use that equity in order to pay off your Chapter 13 bankruptcy at a much faster pace. A “pay-off” balance is required by Chapter 13 Bankruptcy in order to effectively repay a part of or the full amount of the debt. In such a scenario, a home equity loan or even refinancing your existing loan might be a good way to pay off the outstanding debt in a Chapter 13 Bankruptcy.

The benefit of taking up a new loan is that it will give you a longer period over which to pay off the debt. This means that you are not limited to the three to five years that the Chapter 13 Bankruptcy allows you. Additionally, most probably you will also be able to find a lower interest rate by refinancing your loan or getting a home equity loan.

When you talk to your attorney ask him or her to work out the remaining balance of your bankruptcy case and to file a motion in order to Incur Debt for you so that you are able to get the new loan. You should also consult your loan consultant in order to figure out what kinds of options are applicable for you in the loan program for your specific situation.

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Debt Consolidation

Debt Consolidation
People who are faced with mounting debts and unpaid bills would most probably have thought of the phrase ‘debt consolidation’. We hear it over and over again, but what exact does it mean? And how does it help those who are in heavy debts?

A common misconception is the debt consolidation is a loan. That is not true. The process of debt consolidation consists of reorganizing the outstanding amount that you owe to your creditors and paying them back under new terms and conditions. The advantages of debt consolidation are that it reduces the total overdue amount and it also decreases the interest rates. Another plus point to debt consolidation is that it can erase financial charges.

In other words, debt consolidation is a process through which the consumer enters into a new contract which helps him or her pay off the old debts with lesser monthly installments.

People often confuse debt consolidation with consolidation loan. However these two things are not the same. To put it simply, consolidation loan is a long term loan that is meant to help you pay off your current debts. The interest rates for a consolidation loan might seem low, but because this is a loan that you have to pay off over a long period of time, the end result is that you will end up paying a lot more money over the years. Because of this catch in consolidation loans, debt consolidation is most probably a better way of paying of your current debts.

Debt consolidation has many benefits to it. For a start, the process of debt consolidation works at doing away with or reducing your past interest and penalty. Another way of saving you money is by consolidating your credit cards so that you do not have to keep track of all the different bills and payment dates. Through debt consolidation all your bills and accounts will be consolidated into one, making payments and keeping track of payments easier for you. Another benefit of debt consolidation is that it reduces the average interest rate on the total amount that you have overdue. A fresh debt consolidation plan is also a good way of coming up with a new payment plan according to your current abilities. A competent consolidation consultant will ensure that new payment plan is structured according to how much you can afford to pay at that point in your life.

The bottom line of debt consolidation programs is to allow you to get rid of your debts as soon as is practically possible. The result of which is that you will at last be free of calls from your creditors and in the long run you will get a new chance to re-establish your credit rating and have a more relaxed life.

http://www.bankruptcyhome.com/debtconsolidation.htm