When you file for Chapter 7 in Oklahoma, the court will appoint a trustee to manage and administer your case. This position comes with a fiduciary obligation to protect your rights and the interests of your creditors.
Although your trustee plays a central role in your bankruptcy, the first and possibly the only time that you will meet them is when you appear at the meeting of creditors. If you have a no-asset case, meaning that everything you own is protected by a bankruptcy exemption, you will probably hear nothing further from them after the meeting. On the other hand, if the bankruptcy estate includes nonexempt assets, they will work with you to collect that property so it can be sold for the benefit of your creditors.
An Overview of the Trustee’s Duties
Your bankruptcy trustee’s primary duty is to collect and liquidate all of your nonexempt property so that the proceeds can be distributed to your creditors. Other statutory obligations (as specified in Section 704 of the U.S. Bankruptcy Code) include:
- To investigate your financial affairs
- Ensuring that you surrender nonexempt property
- Closing the estate as efficiently as possible
- Examining all proofs of claim and objecting to improper ones
- Opposing your discharge if necessary
- Filing a final account of the estate administration with the court and the U.S. Trustee
If your debts include child support arrears, the bankruptcy trustee will provide notices to the party claiming support and the state child support agency to keep them posted on the progress of your bankruptcy. After your discharge, the trustee will provide them with your last known address and the last known name and address of your employer.
What Are the Chapter 7 Trustee’s Powers?
Chapter 7 trustees are vested with significant powers to assist in carrying out their fiduciary obligations to the estate. They can move to dismiss your case for cause, such as:
Actions on your part that are prejudicial to your creditors
Nonpayment of charges or fees mandated under the Bankruptcy Code
Failure to file necessary information
The trustee can also object to any proofs of claim filed by your creditors, which can affect what the other creditors receive when the proceeds of the estate are distributed.
The most significant of the trustee’s abilities is their power of avoidance, which is the frequent cause of litigation in the bankruptcy court. If you make payments to some creditors within 90 days before filing your Chapter 7 case, the trustee can undo these transfers to ensure that all creditors are treated equally. If you transferred property to friends or family with the intention of protecting it from seizure and distribution, the trustee can reverse those transactions too.
Contact an Oklahoma Bankruptcy Attorney
If you live in Oklahoma and are thinking about filing Chapter 7 bankruptcy, the Law Offices of B. David Sisson will help you prepare your petition, explain your obligations regarding nonexempt property, and in general do everything in our power to ensure that your bankruptcy progresses smoothly and there are no issues that could require trustee intervention. To schedule a no-obligation consultation with Attorney David Sisson, please contact us.