Filing for bankruptcy can be a daunting task. People who are seriously considering filing should pursue all avenues before moving forward. If all options are exhausted, speak with bankruptcy lawyers to discuss moving forward.
In a chapter 7 bankruptcy case, all the debtor’s assets are part of the bankruptcy estate unless the court issues a ruling that specific properties are not part of the debtor’s estate. During proceedings, the trustee grants the property to the debtor, or the property under the law is exempt from the collection of creditors. To determine the case’s exempt properties, it is advisable to consult a bankruptcy attorney.
A trustee is appointed to take control of specific resources of the debtor, grant those resources to the estate, and sell or distribute those resources for the benefit of the creditors. The debtor will maintain some resources, that is, if those resources are exempt from being distributed to the creditors. A trustee can recover some previously transferred funds and bring those resources to the bankruptcy estate. Neither the debtor nor any other person or business shall use or shift resources belonging to the bankruptcy estate, unless there is an express court order or notification from the trustee.
If a trustee is appointed in a Chapter 11 bankruptcy case, he or she will handle the debtor’s affairs and decisions regarding the bankruptcy estate. In this case, the trustee will have many of the same responsibilities as a Chapter 7 case trustee, except for different deadlines and procedures. The trustee has the right to propose a reorganization plan.
In a chapter 13 bankruptcy case, the debtor retains ownership of their entire property, unless the court orders otherwise. A trustee is appointed to collect payments, follow the activity of the case and report to the court the fulfillment of the debtor’s obligations. If the debtor does not comply with their requirements, the trustee can request that the court dismiss the bankruptcy case.
If the debtor’s income increases, the creditors or trustee can request a payment increase. Understanding all types of bankruptcy will help you determine which option is best. Do not go the process alone – contact a lawyer today.