When and how are creditors paid by the Panel Trustee? Upon filing of the bankruptcy petition, the debtor turns over all non-exempt property to the court-appointed bankruptcy trustee, who then converts the property to cash to make a distribution to creditors.
The debtor is required to attend a Section 341 hearing which is commonly called the first meeting of the creditors. Creditors of the debtor are allowed the opportunity to ask questions of the debtor regarding the statements and schedules filed by the debtor with the Court.
The bankruptcy trustee presides at this hearing and the debtor is required to answer specific questions outlined in the U. Usually after 60 days from the date of the 341 hearing the debtor will receive a discharge which effectively "wipes out" all dischargeable debts.
Panel Trustee case loads vary between several hundred cases a year to several thousand depending on the location of the Panel Trustee.
Although their obligations are many and varied, the Chapter 7 Trustees’ primary goal is to liquidate assets for the benefit of creditors where possible.
Chapter 7 Trustees distribute approximately $1.5 billion each year to creditors.
In approximately 90% of the Chapter 7 bankruptcy cases filed, there are no assets available for liquidation, either because assets are exempt (protected) by debtors or liened by secured creditors. The Panel Trustee will review the debtor's petition and schedules after they have been filed with the Court.
The Panel Trustee is required to be independent and works primarily for the benefit of the debtor's unsecured creditors. Department of Justice) to administer bankruptcy cases under chapter 7 of the U. Each Panel Trustee must pass a FBI background check and is required to post a bond in each case that he/she is appointed.
Chapter 7 Trustees (also known as panel trustees) are not government employees. Most Panel Trustees qualify for a blanket bond which covers them in each of the cases that they are appointed.
The interim trustee serves until a permanent trustee is elected or designated at the Section 341 hearing.