More business owners in New Mexico are finding it necessary to file Chapter 7 bankruptcy in these trying economic times. Several parties become involved when a Chapter 7 bankruptcy liquidation takes place, but perhaps none of them play a more prominent role than a bankruptcy trustee. This fact makes it necessary for the other parties involved in the bankruptcy filing to understand both the duties and responsibilities of the trustee.
Shortly after the filing of a Chapter 7 bankruptcy, the creation of an estate takes place that includes property owned by the debtor. Bankruptcy law also mandates that a trustee be selected by the United States Trustee to oversee the case. The duties of the trustee are to protect the interests of both the debtor and the creditors.
The main duty of a Chapter 7 bankruptcy trustee is to liquidate the debtor’s assets and oversee the distribution of proceeds to creditors. The trustee must also:
• Collect articles of the estate and liquidate
• Account for the property that is collected
• Ensure the debtor surrenders the property that is required
• Investigate the debtor’s finances
• Examine claims filed against the debtor and object to any that are without merit
• Provide interested parties with information regarding the estate
• File appropriate paperwork with the court
• Close the estate and submit a final report to the court as well as the U.S. Trustee
A trustee is permitted to employ attorneys, appraisers, accountants and other professionals who are necessary to liquidate the estate. The trustee also possesses the power to lease, sell or use all property included in a bankruptcy estate. The complete list of powers entrusted to a Chapter 7 bankruptcy trustee is far-reaching, and debtors will need a professional who possesses experience with the process to explain all of them.
The process of filing a Chapter 7 bankruptcy is a complex legal and financial maneuver that can become difficult for debtors to navigate without help. Individuals who are considering filing for bankruptcy may gain a clearer picture of the process by speaking with a bankruptcy law attorney.