In a bankruptcy case, the trustee manages specific assets to ensure they are handled correctly until used to pay creditors. The trustee is someone appointed by the court to oversee the management of assets and the liquidation process. Often, that trustee is an attorney who is familiar with the case.
When you file bankruptcy, your assets go into a trust that needs to be managed. Which assets are included depends on what type of bankruptcy you file. You’ll have to work with your lawyer to determine which type of bankruptcy to file. Discuss your case with a Minnesota bankruptcy lawyer, like Kain + Henehan, for assistance.
In bankruptcy cases, assets are moved into a trust so a third party can manage them. You still retain ownership of them, but the court assigns someone to manage them. It provides security for the court so that your assets cannot be devalued during the case. It also protects creditors since you can’t transfer the assets away, so they cannot be used for other purposes.
Bankruptcy trustees are appointed by a central body that oversees bankruptcy cases. Every trusty is a certified asset management specialist with experience coordinating bankruptcy asset trusts.
The trustee will likely not be someone that you know. This is by design so that they can be impartial. You don’t have to worry about their asset management ability, however. The court only chooses trustees who have the right skills and qualifications.
How assets are managed depends on the type of bankruptcy that you file. If you file Chapter 7 bankruptcy, your assets are placed in the trust until they can be liquidated. Your house and car may be protected from debtors.
In other types of bankruptcies, your assets are held in the trust until they are used to either pay your debts or returned since your debts are paid.
Trustees play an essential part in the bankruptcy process. However, much more goes into the bankruptcy process than simply selecting a trustee. If you are considering filing for bankruptcy, contact Kain + Henehan by calling (612) 438-8006 or filling out the online form. We are here to answer your questions and help you start the process.
Call or use the contact form below to get started with a free consultation.