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A Trustees play a very important role in Chapter 7 bankruptcies, they essential act as judges for bankruptcy petitions. Once a bankruptcy is filed a Trustee is assigned to the case to review the terms filed. Trustee must uphold all of the federal bankruptcy laws while reviewing each individual debtor’s case. Their main duty is to liquidate all of the debtor’s nonexempt assets, which are established under 11 U.S.C Sections 701 and 704.
The items that the Trustee deems as nonexempt assets will be liquidated to pay off the debtor’s creditors. In some occasions a Trustee will find that there are not any nonexempt assets. If that happens then the Trustee will final a “no asset” report with the court and all of the debtor’s unsecured debts with creditors will be discharged and the debtor will keep all of his or her exempt assets.
It is extremely important to be completely honest when addressing the debtor’s assets. If assets are not information listed within the petitioner, the Trustee may find that the debtor is withholding or avoiding, which could cause the debtor to face substantial trouble. The Trustee has full discretion under their “avoiding power” to determine which assets should be liquidated.
Once a Trustee has determined the debtor’s non exempt assets and has completed the liquidation then the debtor is considered to be free and clear of all unsecured loans and liens.
The law offices of Jayson Lutzky, P.C. has over 29 years of experience. If you are considering bankruptcy, call us today at (800) 660-LAWYER(5299) to set up a free initial consultation. You can also visit us on the web at www.BankruptcyNYC.com.