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Simple English definitions for legal terms
bankruptcy trustee
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A quick definition of bankruptcy trustee:
A bankruptcy trustee is a person who is chosen by the court to manage a person's money and property when they file for bankruptcy. The trustee's job is to make sure that the person's debts are paid as much as possible by selling their property or creating a payment plan. The trustee cannot make decisions without the court's permission. The trustee's duties depend on the type of bankruptcy case, but they always work to help the person pay their debts and get back on track financially.
A more thorough explanation:
A bankruptcy trustee is a person appointed by the court to manage the assets and debts of a debtor in a bankruptcy proceeding. The trustee's role is to oversee the debtor's estate and make recommendations to the court about various debtor demands. However, the trustee cannot act without the approval of the court.
The duties of a bankruptcy trustee vary depending on the type of case. In a Chapter 7 case, the trustee's role is to sell the nonexempt property and distribute the proceeds to creditors. In a Chapter 11 case, the trustee's role is to reorganize the debtor's business obligations, debts, and assets to emerge from bankruptcy and continue operation. In a Chapter 13 case, the trustee's role is to receive the debtor's monthly payments and distribute them to creditors on a payment plan.
For example, if a person files for Chapter 7 bankruptcy, the trustee will evaluate the debtor's assets and determine which ones can be sold to pay off creditors. The trustee will then manage the sale of those assets and distribute the proceeds to the creditors. In a Chapter 11 case, the trustee will work with the debtor to create a plan to reorganize their business and pay off debts over time. In a Chapter 13 case, the trustee will receive the debtor's monthly payments and distribute them to creditors according to a payment plan.