Posts Tagged ‘bankruptcy trustee’

How to Deal with Bankruptcy Trustee?

When you file a petition in the court to get yourself declared as bankrupt under a specific chapter, a bankruptcy trustee is appointed to review your financial situation. Everything that you have (your income, asset, properties, bank accounts, debts) falls under scrutiny. As part of this process, the trustee will ask certain questions to you, mainly related to your finances. So, it is important to get prepared ahead of time so that you can efficiently deal with all those questions.

Photo ID and Social Security Card

The details that you provide while filing your petition is compared with the information included in the relevant documents are thoroughly compared. For this, you will be asked to provide your photo ID and social security card. Everything will be double-checked in order to make sure that the paperwork has thoroughly been submitted and that there are no mistakes over there. This step is crucial to prevent people from fraudulent bankruptcy filings while using someone else’s id.

Understanding the Process

The laws also require the bankruptcy trustee to make sure that the applicant who has filed the petition understands the process and its possible outcomes. They will help you go through a series of documents related to the process in an attempt to educate you what it really means to become bankrupt. This step will help you get a better idea on whether filing such a petition is the right choice for you.

Anticipated Tax Refund

The trustee will look into everything to find out the total amount of money that you owe to different creditors. In this series, they will also try to find out if you are anticipating tax refund. If yes, you must inform the trustee about the same. The amount of tax refund will be used in settlement of your debts.

Life Insurance Policy

Some specific types of life insurance policies tend to develop cash value over a certain period of time. That is the reason the bankruptcy trustee may ask you to provide details about the policies that you own. If it has some cash value, it may be liquidated for cash so that the money thus received could be used towards debt settlement. However, it is important for you to keep in mind that federal laws allow you to exempt $10,775 of the cash value of your insurance policy.

Transfer of Properties in the Last One Year

Many applicants try to save some of their properties from liquidation under the process by transferring the same to other individuals, such as a close relative or a family member. The trustee will look into all such transfers occurred in the last twelve months. As per Section 727 of the U.S. Bankruptcy Code, the trustee has the right to initiate necessary legal actions against you if you are found guilty of any such fraudulent attempt. They can even deny you a bankruptcy discharge.

The more informed you are about what types of questions a bankruptcy trustee is going to ask, the better you will be able to deal with them.


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