Accumulation And Distribution Of Funds To Creditors
Commencement of a bankruptcy case creates a "bankruptcy estate." The estate technically becomes the temporary legal owner of all the debtor's property. It consists of all legal or equitable interests of the debtor in property as of the commencement of the case, including property owned or held by another person if the debtor has an interest in the property. Generally speaking, the debtor's creditors are paid from nonexempt property of the estate.
Chapter 7
An impartial trustee is appointed to administer each chapter 7 case. The primary role of a chapter 7 trustee in an asset case is to liquidate the debtor's nonexempt assets in a manner that maximizes the return to the debtor's unsecured creditors. The trustee accomplishes this by selling the debtor's property. In addition, if the debtor is a business, the bankruptcy court may authorize the trustee to operate the business for a limited period of time, if such operation will benefit creditors and enhance the liquidation of the bankruptcy estate. Chapter 13
When an individual files a chapter 13 petition, an impartial trustee is appointed to administer the case. In some districts, the U.S. trustee or bankruptcy administrator appoints a standing trustee to serve in all chapter 13 cases. The chapter 13 trustee both evaluates the case and serves as a disbursing agent, collecting payments from the debtor and making distributions to creditors. Individuals will have no direct contact with creditors while under chapter 13 protection.
Where can I get legal advice about my Bankruptcy issue or case?
If you have a Bankruptcy Law issue or case and want legal advice for your specific situation, call the law firm below to schedule an initial consultation.
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