The trustee is another attorney who is assigned to your case by the US Trustee to represent the bankruptcy estate. The trustee is the person who administers your estate and distributes any funds that come in during your case. They also make sure what you said in your bankruptcy case is truthful and correct and verify the information you provided. You will meet with the bankruptcy trustee at the 341 hearing, usually about 4 to 6 weeks after your case is filed.
In a chapter 13 you pay the trustee each month during your plan, the trustee then distributes the funds paid in. For example, if your plan calls for payments to your vehicle lender, attorney, unsecured creditors, and arrearages on your mortgage, the trustee will pay each of these during the case. The trustee in a chapter 13 also is paid from the funds you pay in, this is usually estimated at 10%.
In a chapter 7 the trustee may not end up distributing funds during the case. This will depend on whether there are non-exempt assets, transfers that can be avoided or preferences. If there are funds for your creditors, the trustee will distribute the funds. How this will work is after the trustee receives the funds, they will pay a pro rata portion of what was received to each creditor that filed a claim in. The trustee will take a percentage of what is paid in, as well.
Your attorney will help you with all communications with the bankruptcy trustee and will run through what to expect for the 341 hearing.
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