Trustee Compliance After a Bankruptcy Discharge

A court-appointed trustee plays an important role in a bankruptcy proceeding after the debtor obtains a discharge from some of his or her debts. The trustee's role after the bankruptcy discharge will slightly differ in a chapter 7 liquidation compared to a chapter 13 reorganization.

Chapter 7

In a chapter 7 case, the trustee will primarily be in charge of liquidating the estate's nonexempt assets and help the debtor create a plan of liquidation. The plan of liquidation will determine how the proceeds of the estate's assets will be distributed among creditors. The trustee can also choose to exercise its avoiding powers in order to recover more money for the debtor's estate. The chapter 7 trustee will be freed from his obligations after the chapter 7 plan of liquidation has been fully completed and he has complied with filing requirements. After bankruptcy discharge, the trustee gets his release from the assignment.

Chapter 13

A chapter 13 trustee has a lesser role compared to a chapter 7 trustee who oversees liquidation and distribution of assets to pay for non-dischargeable debts. The chapter 13 trustee serves as the disbursing agent in the case. Since the goal is to reorganize or restructure the debtor's resources and finances, the trustee will collect the money from the debtor and distribute them to creditors based on a confirmed plan. The trustee gets paid based on the debtor's payments. The chapter 13 trustee often holds many cases, and even all those filed within an entire judicial district. This means that the trustee's role after bankruptcy discharge can continue for sometime until such time that the confirmed plan is fully implemented.

Getting Legal Advice

To know more about trustee compliance, consult a bankruptcy lawyer. A bankruptcy expert can fully explain the ins and outs of the different types of bankruptcy.