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What is the role of the trustee in a Chapter 13 filing?

On Behalf of | Jul 12, 2021 | Chapter 13

There are many differences between Chapter 13 and Chapter 7 bankruptcy for individuals. They have vastly different timelines and qualifications for filing, for example.

One of the more significant differences is the role of the appointed trustee. In a Chapter 7 filing, the trustee reviews the paperwork submitting by the person filing, just like they do in Chapter 13 proceedings. However, their main role is to sell or liquidate certain assets and then distribute the proceeds among the creditors.

In a Chapter 13 bankruptcy, you won’t have to sell off your property, so what does that mean for the trustee? Understanding the role of the trustee can help you better determine if Chapter 13 is the right form of bankruptcy for you.

The trustee helps conduct the creditor meeting

Creditors have an opportunity to meet and discuss the bankruptcy filing in most forms of bankruptcy, but their discussion is particularly important in a Chapter 13 filing. After all, a big part of the process will involve a multiple-year repayment plan.

The trustee overseeing your proceedings will manage the creditor meeting. They will have the authority to ask you questions about your finances just like the creditors will. After the meeting, once you have established a repayment plan, the trustee will be the individual who accepts your monthly payments and distributes those funds to the creditors.

The trustee helps to facilitate the repayment plan and bankruptcy proceedings so that you don’t make any mistakes due to simple oversight. Making payments is a big part of a Chapter 13 filing that you won’t have to personally stress about thanks to the service of the trustee. Recognizing the differences in trustee roles can help you better understand which form of bankruptcy would be better for you.


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