Understanding the Role of the Georgia Bankruptcy Trustee

Filing for Bankruptcy

Filing for bankruptcy is a viable option if you are facing financial constraints. While it may not be your first option, it is a means to help you get back on your feet. You can regain your financial freedom and manage your debts in this manner.

However, filing for bankruptcy is full of technicalities and a considerable amount of paperwork which might make it challenging to navigate alone. Therefore, you might need to secure professional assistance and hire a bankruptcy attorney to guide and represent you at this time.

Who Is a Bankruptcy Trustee?

You might encounter several personalities during bankruptcy proceedings, including an official known as a bankruptcy trustee. The bankruptcy trustee represents the debtor’s estate and ensures that bankruptcy proceedings comply with the law. They are thus an essential part of the proceedings and work to bring the case to a logical conclusion.

Who Appoints a Bankruptcy Trustee?

Bankruptcy trustees are usually appointed via the United States Trustee Program. The program is the arm of the United States Department of Justice, charged with administering bankruptcy matters. The program operates across the country in 21 administrative regions, with a United States Trustee appointed by the federal Attorney-General for each region.

The United States Trustee then appoints private trustees to bankruptcy cases within their specific coverage region. These trustees monitor and administer bankruptcy proceedings brought under chapters 7, 11, 12, and 13 of the United States Bankruptcy Code.

Bankruptcy trustees can also be appointed by the court when they fulfill certain conditions as stipulated by law.

Functions of a Bankruptcy Trustee in Georgia

The primary function of a bankruptcy trustee is to represent the debtor during proceedings. However, their specific duties vary depending on the particular case and the form of bankruptcy in question. For instance, a standing Chapter 13 trustee is responsible for administering bankruptcy claims based on Chapter 13 of the Bankruptcy Code.

Other functions of a Chapter 13 trustee include;

• Review of the bankruptcy paperwork: This includes the petition and repayment plan. The trustee should ensure that the repayment plan is fair to creditors.

• Collecting plan payments and distributing funds to creditors: Your bankruptcy trustee will distribute your monthly payments to your creditors under the plan’s terms.

• Execution: The standing Chapter 13 trustee implements the terms outlined in the Chapter 13 trustee plan

• Compliance: The trustee evaluates the bankruptcy plan and ensures that the terms are compliant with the law

• Attending confirmation hearings: The trustee has to confirm the feasibility of the debtor’s repayment plan before a judge if the question arises. 

• To investigate the bankrupt party to find and realize the debtors’ assets to benefit the creditors.

• To report any misconduct by the debtor to the Financial Conduct Authority.

The roles of the bankruptcy trustee differ in cases assigned under the relevant portions of the law such as Chapter 7 or Chapter 11. You might want to contact a bankruptcy litigation lawyer to provide more insight.

What Does a Bankruptcy Trustee Look for?

Bankruptcy trustees work to gather the debtor’s assets as much as possible and apply the proceeds towards the payment of the creditors. To facilitate this, the bankruptcy trustee ensures that the debtor has fully declared all assets and sources of income.

The trustee does this by investigating anything suspicious, including;

1. Red flags in your declaration

The trustee will be on the lookout for hidden assets and will query any portion of your declaration that indicates this, including ;

• Undervalued or omitted assets
• If your income levels do not account for the assets you have
• A claim of loss of property from theft with no evidence report or insurance claim
• Missing financial records
• Income from unlisted sources
• Fraudulently transferred property

2. Suspicious banking activity

The bankruptcy trustee uses bank statements to look for evidence of your income and expenses. They will ask questions about any significant transactions. Suppose you did a high-value money order transaction with someone before filing for bankruptcy. Your trustee may have to bring the money back to the bankruptcy estate for your creditors to share.

The trustee is also likely to look at paycheck stubs, tax returns, and other financial statements to confirm the information the debtor provided and rule out any form of fraud.

Other Strategies for Finding Hidden Assets

In addition to investigating the debtor’s declaration and financial records, a bankruptcy trustee will often employ other means to recover any hidden assets, including;

• Reviewing existing debts
• Obtaining reports from a former spouse, friends, or business partners
• Conducting public record searches
• Conducting online asset searches

How Far Back Does the Bankruptcy Trustee Look?

During their investigation, bankruptcy trustees are empowered by the Bankruptcy Code to assess documents such as tax returns and bank statements for up to two years before the beginning of the bankruptcy suit. Furthermore, the Uniform Voidable Transactions Act gives bankruptcy trustees the power to undo a fraudulent transfer that occurred within four years preceding the bankruptcy suit. The trustee exercises all these powers to prevent the fraudulent disposal of the debtor’s assets.

Is It Lawful for a Bankruptcy Trustee to Monitor Your Bank Account?

A bankruptcy trustee is empowered to audit your bank accounts and check them when necessary. The trustee monitors your bank accounts, and on the date of your hearing, they also check your account balance to ensure it tallies with the information submitted to the court.

The bankruptcy trustee also needs to check the debtor’s accounts periodically to confirm that the money there will be enough for any scheduled loan repayments and that money has not been hidden from the bankruptcy court.

Closing Remarks

It is crucial to be candid and transparent with your bankruptcy trustee when filing for bankruptcy. Please do not leave any vital information out as it may be treated as fraud. Whenever you feel like you left out important information, call your trustee as soon as you can and explain that it was not intentional.

It would also be best to engage the services of an attorney to support you in this journey. Bankruptcy has long-term legal and financial consequences. An attorney can provide legal guidance to ensure that the process is successful or determine if bankruptcy is the appropriate legal option for you. Therefore, if you’re in Atlanta, GA, or elsewhere in the Northern District of Georgia, you can visit the office of a trusted bankruptcy litigation lawyer who can guide you through the bankruptcy process from start to finish.