Facts About A Bankruptcy Trustee
Anyone who have ever gone through a bankruptcy has come in contact with a bankruptcy trustee, also called an agent, fiduciary, or custodian. However, not many people have a clear understanding of how a fiduciary gets paid, or what qualifies them for the position. Once a person files and is approved for bankruptcy, a fiduciary is assigned to their case and is in charge of all the non exempt assets that the person owns.
The agent is responsible for handling the bankruptcy case ensuring that all paperwork submitted by the individual is completed and correct. He or she will also work with the individual who filed throughout the proceedings. In addition, the agent will answer any questions the individual may have as well as taking control of all non exempt assets. It is not usual for the custodian to be in constant contact with the individual, however they are available by phone when needed.
Agents are given the authority by the court to sell or auction off the individuals non exempt assets. He or she will stay in contact with the persons creditors paying them from proceeds of the auction or sale of the property. It is not unusual for the agent to handle more than a few cases at the same time.
In addition, agents have complete control over the persons non exempt property and has the authority to sell them. Also, this means that without the approval of the agent, the individual cannot give away, throw out, or sell any item. In the event that items are sold, given away, or thrown out without permission, the case can be dismissed and the individual will no longer be protected by the courts.
A fiduciary works under the United States Trustee Office. Throughout the US there are twenty one regional offices. The Trustee Office oversees the agents to make sure that every case is carried out according to federal law. Although it may appear that the agent is working for the courts, creditors, and the filing individual, they are at the end of the day reporting to the US Trustee Office.
There is no specific training necessary to become a fiduciary. A law degree is not required for the position, however the positions are usually held by local bankruptcy attorneys. Several days after an individual files for a case with the court for financial insolvency they receive notification by mail of who their agent is.
The agent is paid by commission which is a percentage of the proceeds from the sale or auction of the non exempt assets. Although this is seen as an incentive for the agent to sell items at the highest price they can get, they usually go for the quick sale so that they can complete a case and move on to the next.
Before anyone files a case it is advisable that they understand how the process works and the role of the bankruptcy trustee. It is important to understand and respect the authority that the agent has to avoid any violations that could jeopardize the case. If a violation occurs and the case is dismissed, the debtor will not be able to refile for a period of time.
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