Who is the trustee and what do they do?
Once your chapter 7 bankruptcy case is filed with the court a Chapter 7 Trustee is assigned to your case. The Trustee is an independent party that is supervised by the Office of the U.S. Trustee (a division of the U.S. Department of Justice). They are not an employee of the bankruptcy court or the federal government. They are typically private individuals that are bankruptcy attorneys and represent debtors in bankruptcy cases. The Chapter 7 Trustee’s main job is to review the information that was filed with the Court and to determine whether there is any non-exempt property in the bankruptcy estate that he/she could distribute for the benefit of the creditors.
Your chapter 7 case gets automatically assigned to a Chapter 7 Trustee. Sometimes if there is a repeat filing the trustee in your first case will be reassigned your most recent case for consistency. The Trustee will be the hearing office at the 341 hearing. Each debtor is sworn in and gives testimony under oath as to the filings made to the court. The Trustee will ask questions to verify the information that has been filed with the Court. The Chapter 7 Trustee also reviews certain information prior to your hearing to see if there are valid liens against property, review bank account balances, etc. If the Trustee finds any assets that are not protected by Ohio exemptions he/she will liquidate those assets and use the proceeds to pay creditors.
How They Operate
Chapter 7 Trustees are paid a fee of $60 for each Chapter 7 case they are assigned to preside over. If the Trustee recovers any assets in a case they are paid a commission as to the amount of assets they recover for the estate. The Chapter 7 Trustee receives 25% of the first $5,000.00 distributed; 10% on the next $45,000.00 distributed; 5% of the next $955,000.00 and 3% for every dollar distributed in excess of $1,000,000.00.