During the course of an ordinary chapter 7 bankruptcy, you are not likely to encounter a lot of correspondence from your bankruptcy trustee. To better understand how to handle things when you do hear from them, read on for some tips.
- Your trustee doesn't work for you; they work for themselves and the federal government. They are put in charge of your bankruptcy and they are paid a flat fee for doing so. If they happen to seize property or cash in the course of their work (which is rare), they are also paid a percentage of that.
- You will probably only hear from the trustee a few times. Once you receive confirmation of your federal filing, you will be informed by the trustee of the creditor's meeting. Other than that, you might also be subject to a property inspection. Some trustees (or their representatives) may tour your home or other property, make notes, and take photos. This is to verify that your property listed in the bankruptcy application is correct.
- Your trustee has the power to review your previous financial transactions going back several months before you file. If you've sold or given way property or cash in the last months leading up to your filing, discuss it with your bankruptcy lawyer.
- Your trustee will be reviewing your bankruptcy paperwork and looking for red flags. If they are uncertain about an entry or need more information, they may contact you. For example, if you list a home that is worth a million dollars but fail to list other expensive items like vehicles, boats, vacation homes, etc., they may want to know more about your situation. By the way, contact is always made through the mail, and you should take all such correspondence to your lawyer right away. The higher the value of your assets, the more likely it is that you will be asked to elaborate on them.
- In some cases, trustees may also ask you for things like bank statements, receipts, tax returns, and more. They may, for example, ask you to provide them with a pay stub proving income.
- Trustees take a keep in interest in the value of things since they earn their pay based on items seized. Value, however, is a tricky thing. For bankruptcy purposes, it is the liquidation value of an item that is of interest. To that end, you might be asked to allow a professional appraisal of real estate, jewelry, artwork, and more.
Don't try to deal with these confusing and potentially stressful requests alone. Speak to a chapter 7 bankruptcy law service to find out more.