What are the duties of a Chapter 13 bankruptcy trustee?

If you plan to file for Chapter 13 bankruptcy protection, you will almost certainly deal with a bankruptcy trustee. A trustee in bankruptcy is someone appointed by the court with certain responsibilities and powers. The authority of a trustee will vary depending on the type of bankruptcy involved and the individual circumstances of the case. 

As FindLaw explains, when a person files a petition for bankruptcy, the court creates a legal entity called a bankruptcy estate. The court then appoints a trustee to oversee the estate until the bankruptcy process is complete. The trustee will review claims by creditors and debtors to make sure they are valid. Since Chapter 13 bankruptcy involves repaying creditors, a trustee will have the responsibility of managing the payments as well. 

Trustees and repayment plans

Composing a repayment plan is a vital part of Chapter 13 bankruptcy. Depending on the kind of debt you owe, you might settle for paying back only part of the amount as part of your plan. However, your repayment plan is subject to court approval. Your trustee, after reviewing the plan, might object to parts of it. If so, you will have to go back and revise the plan until the court finds it acceptable. 

Trustees and making payments

Many people file for bankruptcy to stop creditors from harassing them for overdue payments. Still, you might dread having to deal with your creditors when it comes to repaying them. However, once your repayment plan receives court approval, you do not have to worry about dealing with your creditors. 

While your repayment plan will lay out the payments you will have to make, you do not have to send those payments to your creditors yourself. Your trustee will collect your payments from you and then distribute them to whoever you owe money to. This arrangement may help relieve stress since it simplifies the repayment process and keeps distance between you and your creditors.