What is a San Diego Bankruptcy Trustee? Why is it important?
Although bankruptcy proceedings often lack the drama involved in other courts, it’s only because most people don’t understand what’s going on behind the scenes, who the players are and the very real costs posed by mistakes in their case.
If you think it’s expensive to hire a professional to do the job, wait until you hire an amateur. Red Adair
Let me introduce you to Potential Enemy #1: the Ch. 7 trustee, rivaled only by the U.S. Trustee’s office. The first mistake people make is to think the bankruptcy trustee is like or similar to a judge. The Bankruptcy trustee’s role is not benign. More often than not, it’s not your creditors that spot the “holes” in a bankruptcy case; it’s the trustee. That’s their job as trustees to find those holes. They have a financial interest in spotting those holes that an attorney can leave open. That is why who you hire as a bankruptcy attorney matters. Who you hire assures you get everything you are legally entitled to.
Whenever a bankruptcy is filed in the United States, the court will appoint a person to administer the bankruptcy. “Administer” means something akin to shepherding the case from filing to finish but with a couple of important and sometimes partisan goals. Though these folks (Ch. 7 trustees) may not have anything against you personally, they are on constant watch for what of your property they can take for the creditors.
San Diego Bankruptcy Trustees are paid a commission on your bankruptcy filing
The Trustees get to keep a cut for themselves as a sort of commission. This commission is based on the nonexempt assets that are available after the exempt assets are accounted for. Some non-exempt assets – but not an inclusive list – are:
Stocks, bonds, cash
If you have assets that are not exempt the Bankruptcy Trustee gets a part of that.
The amount the San Diego Bankruptcy Trustee is paid is based on a sliding scale as follows:
25% of the first $5,000 disbursed
10% of the next $45,000
5% of the next $950,000, and
3% of anything over $1,000,000.
Additionally, it will be the job of the Ch.7 Trustee to ensure that there is no “preferential payment to creditors”: for example, someone might choose to pay members of their family over other debtors. The Bankruptcy Trustee will make sure that this does not occur and that all creditors are paid fairly.
Due to this adversarial relationship, it is really important to hire a bankruptcy attorney who is not afraid to go “toe to toe” with the Trustee(s) – so you get to keep as much of your belongings as is legally justified. If you want to know what is possible and the strategic planning we have implemented, review our Bankruptcy True Stories and read them yourself.