Bankruptcy trustees
A bankruptcy trustee is a person nominated by the United States bankruptcy Trustee. The United States Bankruptcy court approves this person and he takes charge and administers the proceeding of the debtor?s case during bankruptcy proceedings.
Background of the U.S. Trustee Program
The United States Trustee Program, which was established as a pilot effort from 18 districts by the Bankruptcy Reform Act during the year 1978. Later it was expanded to more than 21 Regions nation wide.
The United States Trustee Program:
The United States Trustee is a part of the Department of Justice that is committed in promoting and protecting the integrity of the Federal bankruptcy system. This trustee also plays an important role in the speedy and economical resolution of the entire cases file in the bankruptcy court.
This trustee also helps the private creditors to identify and investigate bankruptcy frauds and abuse with the United States Attorneys.
Specific Responsibilities of the U.S. Trustees may include:
The Trustee is responsible for appointing and supervising private trustees.
To take legal action and check for fraud and abuse.
To send references for investigation at appropriate time
To ensure bankruptcy estates are administered efficiently.
To Review disclosure statements and applications for the retention of professionals
To Advocate matters relating to the Bankruptcy Code and rules of procedure in court
U.S. Trustee Program Mission Statement:
The Executive Office for U.S. Trustees provides general policy and legal guidance to the debtors and also oversees the Program's substantive operations, and handles administrative functions.
THE NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES
The National Association of Bankruptcy Trustees was formed during 1982 in order to address the needs of the trustees and to promote an effectiveness of the bankruptcy system. The trustees representing Chapter 7 distribute approximately $1.5 billion dollars each year to creditors and administer covering more that a million cases annually. There are more than 1,200 panel trustees in the country who are receiving new cases on a day to day basis, three quarters of whom are NABT members, together with hundreds of associate members, including judges, United States Trustees (USTs)2, auctioneers, appraisers, insurance agents, bankers, attorneys, and accountants who frequently work with trustees.
Filing for bankruptcy is the very last resort for people overburdened by debts and unable to clear them. The decision to file bankruptcy is a grave one and it is recommended not to make such a decision in haste. Many people choose this option without finding out the available alternatives to bankruptcy.
General functions of trustee
The trustee is responsible for the distribution of the bankrupt?s estate. He is also responsible for carrying out functions and manages the bankrupt?s estate.
The bankrupt's estate shall vest in the trustee immediately on his appointment taking effect or, in the case of the official receiver, on his becoming trustee.
The trustee can apply to the court for imposing charges in the property consisting of an interest dwelling in the house.
Powers of trustee
The trustee can allow the bankrupt to perform the following activity with the permission of the creditors' committee or the court, to :
To superintend the management of his estate or any part of it,
To carry on his business (if any) for the benefit of his creditors, or
To assist in administering the estate in such manner and on such terms as the trustee may direct.
Acquisition by trustee of control
The trustee appointed by the court for a particular bankruptcy case shall take possession of all the books, important papers and records belonging to the bankrupt or under his control.
The trustee can exercise any possession of stocks or shares in a company or ship or any other document that is transferable to the same extent as the bankrupt might exercise if he has not become bankrupt.
Liability of trustee
Where on an application under this section the court is satisfied -
The trustee of a bankrupt's estate has misapplied or retained, or become accountable for, any money or other property comprised in the bankrupt's estate, or
The bankrupt's estate has suffered any loss in consequence of any duty by a trustee of the estate in the carrying out of his functions the court may order the trustee, for the benefit of the estate, to repay, restore or account for money or other property together with interest at such rate as the court thinks just) or, as the case may require, to pay such sum by way of compensation in respect of the misfeasance or breach of fiduciary or other duty as the court thinks just. This is without prejudice to any liability arising apart from this section
An application under this section may be made by the official receiver, the Secretary of State, a creditor of the bankrupt or the bankrupt himself.
But the leave of the court is required for the making of an application if it is to be made by the bankrupt or if it is to be made after the trustee has had his release.
Where -
The trustee seizes or disposes of any property which is not comprised in the bankrupt's estate, and
At the time of the seizure or disposal the trustee believes, and has reasonable grounds for believing, that he is entitled (whether in pursuance of an order of the court or otherwise) to seize or dispose of that property,
The trustee appointed by the bankruptcy court is not liable for the loss or damage of the items seized or disposal. He will be liable only in the case when the damaged is caused by the negligence of the trustee.
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