Upon filing a Chapter 7 bankruptcy case, all of the property which is owned by the Debtor filing the case is placed in to the bankruptcy estate. That estate is, during the course of the case, placed under the control of the Trustee. The bankruptcy court appoints a trustee in Chapter 7 cases to oversee the case and administer the property in the estate.
The trustee will initially review the Debtor’s filings concerning their financial conditions. He or she will seek to verify the accuracy of much of the information contained in the Debtor’s Schedule of Debts and listing of earnings and income. After becoming familiar with the property in the estate and the nature of claims against it, the Trustee will conduct a hearing, known as a 341 meeting, where the Trustee will have the opportunity to ask the Debtor questions about the particular items asserted by the Debtor in the bankruptcy petition and supporting documentation.
In some instances, particularly where a creditor has reason to believe that the Debtor may seek to hide assets; creditors may also attend the 341 meeting and participate in its proceedings. The 341 meeting occurs approximately a month after the Chapter 7 cases are filed although, in some instances, it may be a little later than that.
The trustee will then seek to determine which assets of the bankruptcy estate are non-exempt. If an asset or piece of property is non-exempt, the trustee will liquidate or sell the asset. The proceeds from such sales will be used to pay off the claims of creditors to the extent such is possible. If there are no nonexempt assets, the trustee will submit to the court a finding, in the form of a written report, that there will be no distribution to creditors.
The trustee also has additional powers including the power to void certain security interests held by secured creditors and to seek recovery or recoupment of any preferential transfers which appear to have been made before the Chapter 7 case is filed.
The bankruptcy trustee plays a very significant role in Chapter 7 bankruptcy cases. The Debtor should discuss with his or her bankruptcy attorney the nature of the Trustee’s role, how to prepare for the 341 meeting and what actions may be expected to be undertaken by the Trustee. And the Debtor’s attorney should keep the Debtor apprised of any specific actions taken by the Trustee which has actual bearing on the case.
In Albuquerque, Giddens & Gatton Law, P.C. has bankruptcy attorneys who offer expert handling of Chapter 7, Chapter 11, Chapter 12 and Chapter 13 bankruptcy cases in New Mexico. The firm represents many debtors and creditors in Albuquerque, Santa Fe, Taos, Raton, Farmington, Gallup, Grants, Roswell, Los Lunas, Placitas, Belen and the rest of New Mexico. Contact Giddens & Gatton Law, P.C. at (505) 633-6298 to set up an appointment with one of its New Mexico bankruptcy lawyers or visit the firm’s website at giddenslaw.com. Giddens & Gatton Law, P.C. is located at 10400 Academy Road N.E., Suite 350 in Albuquerque, New Mexico.