While getting behind and facing bankruptcy, you may be wondering “What is a Bankruptcy Trustee in Georgia?” Bankruptcy Trustees are people who are appointed, or selected, to oversee particular Georgia bankruptcy cases or a particular type of bankruptcy, such as Chapter 7 Bankruptcy or Chapter 13 Bankruptcy.
“What does a Bankruptcy Trustee in Georgia do?” A bankruptcy trustee’s duties vary depending on the type of bankruptcy case, as well as the circumstances of a particular debtor and their creditors. This post will dig deeper into these topics so read on.
The Bankruptcy Estate and Bankruptcy Trustee
The bankruptcy trustee overseeing your bankruptcy case receives a small fee for examining your paperwork, and a percentage of any assets sold during the foreclosure process or liquidation of your assets. Paying the trustee based on commissions of assets sold gives the trustee incentive to carefully scrutinize the debtor’s property, including any property sold or transferred before the bankruptcy filing. Although the trustee must be fair to the debtor (you), their interests aren’t always aligned. Be aware that your goal is to keep as many assets as possible while a bankruptcy trustee’s goal is to sell as many for as much as possible. Therefore, how much the trustee will be willing to help you—such as by answering your questions—will depend on the individual trustee that is working on your case.
What Does a Bankruptcy Trustee in Atlanta Georgia Do?
Reviewing the Bankruptcy Petition
Filing for bankruptcy in Georgia involves completing a petition and other types of bankruptcy forms. In these bankruptcy forms, you’ll disclose personal and financial information about your debts, property, income, and the state of your financial affairs. You will also likely have to send the bankruptcy trustee things that will substantiate the information you provide in your bankruptcy paperwork, such as pay stubs, tax returns, and information about your assets.
It is the trustee’s job to review your bankruptcy petition and verify the information and calculations using your financial documents and other independent sources. For example, if you state that you and your spouse make $6,000 a month in your bankruptcy papers, the trustee will compare that against your pay stubs to make sure the figure is accurate. They prepare and verify all of your documentation that you are filing for your bankruptcy. Here’s a look into how a bankruptcy trustee reviews your bank statements.
Bankruptcy Trustees Selling Your Assets
The Chapter 7 bankruptcy trustee is also responsible for selling property that the debtor cannot protect, and distributing the funds to creditors.
In Chapter 7 bankruptcy, you can keep, or “exempt,” a certain amount of your property, such as household furnishings, clothing, and a qualifying retirement account. The particular assets that you can protect will depend on your state’s exemption statutes.
When you have nonexempt property. Any nonexempt property – property you own that’s above and beyond the amount allowed by Georgia – will be sold by the bankruptcy trustee in Georgia to pay your creditors. Non-exempt property can usually be claimed by a creditor. Some examples of non-exempt property for Chapter 7 purposes are: Cash, bank account funds, and securities like stocks or bonds. It’s important to determine what will happen to your property before you file for Chapter 7 bankruptcy in Georgia. You don’t have an automatic right to dismiss your case, and many judges will not allow you to do so just because you didn’t realize the trustee would sell your property.
When you don’t have non-exempt property. If there aren’t any non-exempt assets, the trustee will prepare a report stating your case is a “no asset” case and that there won’t be any distributions to creditors.
If the debtor and trustee disagree about the exemption status of a particular asset, the bankruptcy judge will make the final determination.
Also, if you have property that you need to turn over, you—or your bankruptcy attorney, if you’re represented—will make arrangements with the trustee to do so.
Examining the Debtor
Approximately a month after you file your case, you must attend the 341 meeting of creditors in front of the bankruptcy trustee. The court will set the meeting of creditors between 21 and 40 days after your bankruptcy filing date. It will take place in a meeting room at a federal building or at an offsite location. Other bankruptcy filers will appear at the same meeting time, so you’ll want to check the docket to see where your case falls on the schedule.
How does a Chapter 7 & 13 Bankruptcy Trustee get paid?
Anyone filing bankruptcy will wonder, “How does a bankruptcy trustee in Georgia get compensated for the work that he does,” and “Who pays the bankruptcy trustee?”
Bankruptcy trustees get paid in several ways.
Bankruptcy Trustee Commissions
According to the statutory bankruptcy commission formula, which states that the trustee will receive a “trustee commission” based on a sliding scale statutory formula which is set forth in Bankruptcy Code section 326, the Chapter 7 trustee will receive:
- 25% of the first $5,000
- 10% of the next $45,000
- 5% of the next $950,000
- 3% of the balance
Finally, the trustee is entitled to be paid for any legal services that he performs in order to collect and liquidate assets. Some trustees will hire other bankruptcy law firms in Atlanta, Georgia to do this work, whereas other bankruptcy trustees will basically hire themselves so that they can acquire more income for their services.
The caveat is that a bankruptcy trustee in Georgia cannot be paid a commission or legal fees unless he makes an application to the court and receives approval from the bankruptcy judge. Commissions and trustee legal fees are paid out of the funds raised by the trustee for the bankruptcy estate in Georgia.
What are the powers of the trustee?
The trustee in a Chapter 7 liquidation case is authorized to employ accountants, bankruptcy attorneys in Atlanta, Georgia, appraisers, auctioneers and other professionals to assist in carrying out his or her duties. Additionally, the trustee may use, sell or lease property of the bankruptcy estate, subject to a notice requirement. However, there is no notice required for a trustee to enter into transactions in the ordinary course of business if he or she is authorized to operate the debtor’s business. The trustee is also authorized to obtain unsecured or secured credit in connection with the operation of a business and assume or reject executory contracts or unexpired leases of the debtor.
A trustee is vested with significant powers to aid in carrying out his or her fiduciary obligations to the bankruptcy estate. Among them is the ability to move to dismiss a bankruptcy case for cause, including unreasonable delay by the debtor that is prejudicial to creditors; non-payment of any fees or charges required under certain provisions of the Bankruptcy Code; and failure of the debtor to file certain information required under the Bankruptcy Code.
The most significant of the trustee’s powers are generally referred to as avoidance powers, and they are often the subject of litigation in the Bankruptcy Court. Known as the “strong arm clause,” Section 544(a) of the Bankruptcy Code gives the trustee the rights and powers of a judicial lien creditor or a purchaser of real estate, whether or not there is an actual judicial lien creditor or purchaser who may be able to exercise the same rights. Section 544(b) allows the trustee to bring actions that an unsecured creditor could bring (including state law fraudulent conveyance actions), while Section 545 permits the trustee to avoid the fixing of certain statutory liens. Section 547-Preferences authorizes a trustee to avoid certain transfers of property, including payments made by the debtor to creditors, within 90 days prior to the commencement of a bankruptcy case (subject to certain conditions).
Selling Your House During Bankruptcy In Atlanta, Georgia
Your bankruptcy attorney in Atlanta will assist you with the necessary steps to sell the property during bankruptcy, as they relate to the Bankruptcy Court and the Bankruptcy Trustee that’s on your case.
Generally, you choose the Georgia Realtor you want to hire or the investor that you want to sell your house fast during bankruptcy to. The realtor must then be approved and hired through the Bankruptcy Court. While the Bankruptcy Court doesn’t care which realtor you hire, the Court does want to make sure the agreement between you and the realtor is fair to all parties.
For example, the Court wants to make sure the realtor isn’t charging a real estate commission that is too high for the market or the transaction. If you sell your house to an investor, the investor will have to work directly with the bankruptcy trustee and the Bankruptcy Courts to negotiate the sell of your home. So, you’ll want to make sure that the “we buy houses in Atlanta” company that you work with has the experience of working with these types of bankruptcy situations.
Once you receive purchase contract on your house, your attorney will submit that contract to the Bankruptcy Court for its approval. Any net proceeds, after paying all mortgages and liens and paying you your homestead exemption are paid into your Chapter 13 bankruptcy and distributed to your creditors.