Whenever a person appeals for bankruptcy he or she has to follow certain rules and regulations. There is a well laid out role under chapter 13 trustee which has been codified 1978 under 11 U.S.C. section 1302. As per the broad terms of this role a chapter 13 trustee is appointed by the relevant authorities take care of the case. Only under abnormal circumstances or when there is a conflict of interest between the trustee or the debtor, the person appointed will not continue to perform the role of chapter 13 trustee throughout the entire period of the case.
Chapter 13 Trustee on Certain Important Points To Be Kept In Mind
There is no doubt that while the chapter 13 trustee is given certain powers, he or she does not have the legal authority to enforce something arbitrarily on the debtor. Whenever there is an instance of dispute between the trustee and the debtor which cannot be resolved by mutual consent, there is a provision for the two sides to take the matter to the court who then will become the arbiter. Hence whenever there is an insolvency case where the role of a chapter 13 trustee is involved there are some requirements that should be kept in mind. The debtor is bound under the law to appear before the trust and this is also referred to as 341 hearing. This would entail the person who is insolvent to be put under oath and subjected to questions that could be in relation to the petition.
Roles Are Different Depending On The Act
Whether it pertains to foreclosure related cases or something else related to bankruptcy the rule of the trustee is different in different acts. The role in Chapter 7 is totally different when it is compared to Chapter 13. The main role of the trustee in Chapter 7 will be to find out whether the debtor has assets that are non-exempt. In case it is non-exempt then the trustee can liquidate the assets. This is however not possible in the case of Chapter 13. Hence many of those who are bankrupt would opt for Chapter 13 because there is little risk of the asset being sold without his or her consent.
In the case of chapter 13 the debtor is bound to pay a monthly payment to the trustee for a period of 36 to 60 months. The trustee in turn uses the payment to distribute the money amongst various persons who are owed money. However, this is distributed only to those who have filed a proof that they are owed money by the debtor. In the process the trustee is entitled to get a commission of 10% for making the distribution to the creditors.
In the absence of a payment plan in chapter 7, which is available in chapter 13, there should be the need for confirmation of such payment plan beforehand. The onus lies on the trustee to ensure that the creditors are treated fairly when it comes to such bankruptcy resolution. The next job is to ensure that the avenues of disagreements are narrowed down and kept to the minimum for the benefit of all concerned. Hence given the above problems there is no doubt that chapter 13 is always a better option when compared to other acts.