What is a Bankruptcy Trustee in Arizona?
Anytime a Chapter 7 or 13 bankruptcy is filed in the state of Arizona, the court will appoint a bankruptcy trustee. The state of Arizona is not the only state that appoints trustees in bankruptcy proceedings. This is a common practice across the United States. Arizona appoints trustees who specialize in Chapter 7 and 13 bankruptcies. These trustees live all over the state to better serve the people who file bankruptcy no matter where they may be in the state.
The Role of an Arizona Bankruptcy Trustee
Most people ask their lawyers what a bankruptcy trustee is, followed by what do they do. A trustee is a person who is assigned to your bankruptcy case that represents your creditors. Your creditors are the people and companies in which you owe money to.
Chapter 7 Bankruptcy
During a Chapter 7 bankruptcy, all of the property that you own, with a few exceptions, becomes the “bankruptcy estate”. The trustee in the bankruptcy will be responsible for taking these properties and liquidating them into cash. This cash will then be divided amongst the creditors of the bankruptcy.
Things that you can claim as an exemption in bankruptcy are items intended to help you move on after filing. If something is exempt during a bankruptcy, that means it is not touched or listed in the bankruptcy. When you make these exemptions, the trustee will review it, and if they do not agree with it, they can challenge it.
After the bankruptcy proceedings are over, the case is discharged. When the discharge occurs, it means that you are no longer responsible for the debts covered by the discharge. The trustee of the case has the ability to object to the discharge.
Click here for an article by Nolo about the bankruptcy trustee.
Chapter 13 Bankruptcy
The trustee still has the same responsibility in a Chapter 13 bankruptcy that they did in Chapter 7, only with more responsibilities added to them. A Chapter 13 bankruptcy is also known as restructuring. This type of bankruptcy is often filed when debtors have a steady income and can come up with a payment plan. The trustee will be a vital part of coming up with the payment plan and ensuring it is executed.
The trustee oversees all of the hearings regarding the payment plan and modifications. Once the plan is approved, the debtor will pay the trustee the amount that was decided upon. The trustee is the one who then sends payments to the creditors.
United States Bankruptcy Trustee
With the exception of Alabama and North Carolina, every state is a part of a much larger United States bankruptcy district. The United States trustee supervises and is the one who appoints the Arizona trustee. The role of the United States trustee is to make sure that all administrative matters run smoothly. The idea is that the trustees take care of all the paperwork and ensuring the bankruptcy goes smoothly so that the court only has to hear cases where there are conflicts or disputes.
Finding a Bankruptcy Attorney
When you decide that filing bankruptcy, whether it is Chapter 7 or 13, it is important to obtain legal counsel. A bankruptcy attorney can help you navigate the bankruptcy system so that you get all the paperwork is done that is required and aren’t missing anything. Most of the local attorneys are probably already familiar with the trustee in the area, which can help your case immensely. Make sure that when you are filing bankruptcy in the state of Arizona that you contact an experienced bankruptcy attorney.
Find out more about the Arizona bankruptcy exemptions by clicking here.