The filing of any bankruptcy petition creates a Bankruptcy Estate, which is a legal entity that holds property in trust for the benefit of bankruptcy creditors. Creation of the Estate causes legal title of most property owned by the debtor at the time of filing to pass to a bankruptcy Trustee. This is known as Property of the Estate. All property of the estate is protected from being sold or repossessed by your creditors by the automatic stay.
The trustee is an person appointed by the United States Trust (see U.S. Trustee Program in Resources) to oversee the administration of a bankruptcy case. In effect, the Trustee represents the Bankruptcy Estate. The Trustee must make sure that the debtor fulfills its responsibilities as defined in the Bankruptcy Code. The Trustee examines documents submitted by the debtor for timeliness and sufficiency, takes an inventory of property, and reviews proofs of claims by creditors. The Trustee presides over the 341 creditor meeting, where the debtor answers questions, under oath, from the Trustee and creditors. The Trustee submits a Final Report to the U.S. Trustee for disposition of the case.
There are some types of property described in the Bankruptcy Code that do not become property of the Estate. These include, but are not limited to some pensions, retirement funds and educational funds. These assets are already protected from your creditors under Pennsylvania law. Bankruptcy lawyer Robert G. Williamson will advise and guide you about what types of property you own which do not have to be included in your bankruptcy petition, as well as what property must be included in your bankruptcy petition and become property of the estate.
The Trustee in your case holds legal title to property of the estate for the benefit of unsecured creditors and has the power to sell partially exempt or non-exempt property of the estate to pay some of your creditors.
The trustee cannot sell any item of completely exempt property. For partially exempt property, you either pay the trustee for the non-exempt value of the property and keep the property, or the Trustee sells it and gives you the exempt value less fees and costs. The trustee can sell non-exempt property of the estate to pay your unsecured creditors.
The Trustee also has a duty to US Trustee, which is a division of the US Department of Justice, to make sure that bankruptcy petitions are truthful, that the filing of the petition is not an abuse of the bankruptcy system, that any action taken by any party in a bankruptcy case is taken in good faith, that the filing of the petition and actions taken during the case are not fraudulent is not fraudulent, and that no bankruptcy crime is committed by filing the case or taking any action during the case. We will be able to make sure that none of these conditions are created by the filing of your case or its continuation, so long as you tell us and the Trustee the truth at all times.
Start on your path to freedom from debt stress today. Call or email Media bankruptcy lawyer Robert G. Williamson for a consultation. We will respond as soon as possible and discuss with you or email to you instructions for what to bring with you to your first meeting with us.