The Role of a Trustee in a Chapter 7 Bankruptcy Filing in Pennsylvania
In a Chapter 7 bankruptcy, Trustees are appointed by the United States Trustee court and are referred to as Panel Trustees. A judge is also always assigned. The Panel Trustees are generally attorneys who have considerable bankruptcy experience, normally have practices within the District, and are appointed to cases on a rolling basis within a given geographic range.
In most cases, the only person to appear in front a Chapter 7 trustee is the debtor. Very rarely in a Chapter 7 case is a debtor appearing in front of a bankruptcy judge. Also, every case is overseen by the U.S. Trustee’s Office, which is, in general, an overseer and is usually not actively involved in the case unless certain elements arise.
So, what’s the job of the trustee? Are they there to just take everything they can from you and give it all to the creditors?
What Does a Bankruptcy Trustee Do in Pennsylvania Bankruptcy Filings?
The answer is no, not at all. There is a different role that a bankruptcy trustee plays in Chapter 7 bankruptcy than in Chapter 13 bankruptcy. As long as the person filing meets the qualifications and their property doesn’t exceed the amount that they’re allowed to keep, which is, again, known as “the exemptions,” then the Chapter 7 trustee will simply then recommend discharge, in which case he or she closes the case and discharge is granted within 60 to 90 days after that meeting.
In a Chapter 7 bankruptcy, the Trustee sells any non-exempt property, if any, and utilizes the funds from the sale of those assets, to paying administration expenses and distributes the balance to the owed creditors. While Chapter 7 is referred to as “liquidation,” this designation is in many respects a misnomer, as the marked majority of Chapter 7 filings are what are referred to as “no asset” cases, as there are no “non-exempt” funds or assets to be distributed to creditors.
Required Court Appearances for Chapter 7 Bankruptcy in Pennsylvania
People always ask how many times a person may have to appear in court when filing for bankruptcy. Does a person go to court just once for a meeting of creditors or a trustees meeting?
In most cases, the debtor has to appear at one hearing. In a Chapter 7 case, there is a meeting of creditors and a meeting for a Chapter 13 bankruptcy case. However, there is a chance that there could be more than one hearing, though it does not occur very often. In most Chapter 7 bankruptcy cases, only one court hearing is required.
What is a Bankruptcy Discharge?
So, the case goes along and, at the end of it, you get what’s called a “discharge.” In both Chapter 7 and 13 filings, at the end of the process, you receive a discharge, which means that any debt–in a Chapter 7 setting, that was incurred prior to the date of filing is discharged or wiped out.
I think, importantly, too, even if there’s debts that weren’t listed on the petition, because you didn’t even necessarily know that they existed, such as a medical bill that you thought was paid but wasn’t paid, as long as that accrued prior to the filing, it’s still gotten disposed of in the bankruptcy.
How Long Does It Take for a Chapter 7 Bankruptcy to Be Discharged?
From the time the bankruptcy is filed, a Chapter 7 debtor usually receives a discharge anywhere from 60 to 90 days.
When Will Debt Collection Activity By Creditors End?
I’m sure creditors hound many people. They get phone calls. They get letters. So, as soon as someone files a case, they don’t have to wait until gets resolved, but as soon as someone files it, the creditors, by law, have to stop bothering them, right?
That’s what’s called “the automatic stay.” There are many creditors, despite there being something called “The Fair Debt Collection Act,” oftentimes creditors don’t honor some of those requirements. Under The Fair Debt Collection Act, creditors are barred from continuing debt collection activity but often they continually contact and harass people.
By the filing of the bankruptcy petition, that automatically stops or stays any type of action on the part of creditors. So, that does all come to an end as soon as someone files. In fact, when clients retain our office, we tell them to direct all their creditors to us, so they don’t have to deal with any more of the harassing calls and contact.
So literally, if a creditor calls and you filed, you should say to them, “Here’s my bankruptcy case number. Don’t ever call me again,” or “Here’s my attorney. Call him. Don’t ever call me again.” Creditors should then only contact your attorney, so you don’t have to deal with the harassment.
Our Philadelphia and Bucks County Bankruptcy Lawyers Can Help You
If you are filing for bankruptcy in Pennsylvania, consult with an experienced bankruptcy attorney at Young, Marr & Associates. Call our Pennsylvania offices today at (215) 701-6519 for a free consultation about your options.
☑ Been paying credit card balances that seem to never go down?
☑ Lost your job and are now having trouble keeping up?
☑ Attempted to work out a payment arrangement to no avail?
☑ Been notified of a mortgage foreclosure action?
☑ Been denied for a mortgage or other line of credit?
If the answer to any of these questions is “yes” then bankruptcy may be an option that you should consider.