If you have declared a chapter 7 bankruptcy, you may have become aware of a figure appointed to preside over your case. The bankruptcy trustee serves the role of the bankruptcy administrator and presides over your creditor's meeting. Your chances of encountering the bankruptcy trustee is connected to the value of your bankruptcy and to the trustee's compensation. Read on to learn more about the trustee's role in your bankruptcy.

The Inspection: When you declare bankruptcy, you are actually "declaring" that you are unable to fulfill your financial obligation to pay your bills. Keeping in mind that a chapter 7 bankruptcy is also known as a "liquidation" filing, some of your property could be seized during the bankruptcy process. While some of it is protected by state law and by exemptions, you may lose vehicles, real estate and other personal possessions. The property seized is sold and applied to your debts. In an effort to ensure that your property list is accurate, the bankruptcy trustee has the right to visit your property to catalog and photograph your property. While no property is taken at the time of visit, you will be informed of any plans to seize property and the date it will be seized.

The Trustee's Slice of the Pie: Not everyone that declares bankruptcy will have their property inspected, but if you own a home and/or have vehicles of any value, it could happen. In fact, the chances of a trustee visiting your home and inspecting your property correlates to the size of your bankruptcy (how much you owe) and the property you own. Not only does the seizure of your property mean that some creditors can be paid, it also affects the amount of pay your trustee gets for handling your case. Your trustee earns a commission on the value of the property seized to the tune of:

• 25% of the first $5,000.00
• 10% of $5,000.00 - $50,000.00
• 5% of $50,000.00 - $1,000,000.00

The trustee also gets $60.00 of the filing fee you paid.

Creditor's Meeting

The other major task of the trustee is to oversee your creditor's meeting. This meeting can be considered your "day in court", where you swear that your paperwork is correct and answer some routine questions about your case. While it is called a creditor's meeting, most creditors don't bother appearing. Your bankruptcy attorney will prepare you in advance if any are scheduled to appear to protest their inclusion in your bankruptcy.

Your contact with the trustee will probably be quite limited, but you should discuss how the trustee might affect your case with your attorney. Talk with an attorney like O'Connor Mikita & Davidson LLC for more advice.