When a chapter 7 bankruptcy case is filed in Oregon, a Chapter 7 Bankruptcy Trustee is appointed by the Court to administer the case. There is only one Trustee appointed from a small list of potential trustees. In Portland, the list of potential chapter 7 trustees is here. The Trustee does not represent the interests of the Debtor which is a key reason why it is always wise to hire your own bankruptcy attorney.
The Main Role of a Chapter 7 Bankruptcy Trustee
The main goal of the chapter 7 trustee is to take money or property away from a chapter 7 debtor and return that money to your creditors. In another article I explain the role of the chapter 13 bankruptcy trustee and how it differs from that of the chapter 7 trustee.
The chapter 7 trustee legally steps into the shoes of the chapter 7 debtor and legally takes over control of the debtor’s financial affairs. If you own a home, the Trustee can in some circumstances actually list your home for sale and force you to sell the home even over your objection. That’s right a chapter 7 bankruptcy trustee can force the sale of your primary residence over your objection if you have too much equity in the home. The proper use of claimed exemptions can minimize this risk.
If you have too much equity in your car, then the Trustee can force the sale of that car. Or too much money in the bank the Trustee can take the money from you. If you have a claim to recover money from someone, like a personal injury claim or a contract claim or a tax refund owed to you, the Trustee in chapter 7 can intercept that money and pay it back to your creditors. When you file for chapter 7 bankruptcy the law requires you to cooperate with the chapter 7 trustee. If you refuse to cooperate then you will not obtain a chapter 7 discharge and since a discharge of debt is the main reason you filed for chapter 7 bankruptcy, cooperation is key.
The chapter 7 trustee will review closely all the information obtained in your bankruptcy paperwork including the list of claimed exemptions. A debtor in bankruptcy will have to meet with the chapter 7 Trustee and answer questions about the information contained in that paperwork. This meeting is commonly called the Meeting of Creditors or the 341(a) meeting which refers to the bankruptcy code section authorizing the meeting. When you file for bankruptcy, all of your creditors will be given notice of the date and time of this Meeting and will be invited to attend and ask you questions as well.
If you live in Beaverton or Tigard or Lake Oswego or any of the surrounding cities in the Portland metropolitan area and file for bankruptcy, then your meeting of creditors will be held in Portland. Here is a link to the location of the Meeting of Creditors in Portland. It can be subject to change so make sure to review your own bankruptcy paperwork. If you live in Salem or Canby or Woodburn then your meeting of creditors will be held in Salem at the Red Lion Hotel.
Before you go to the Meeting of Creditors you are required to provide the trustee with additional documents including your last filed tax return and copies of the bank account statements which prove how much money was in your account on the day you filed for bankruptcy. When the trustee first starts the hearing he will ask if you read the “Bankruptcy Information Sheet” – a copy of which can be found here. During the meeting, the chapter 7 trustee will often ask you questions which go beyond the scope of the basic information contained in the bankruptcy schedules. Hiring a bankruptcy attorney who frequently helps people in Portland file for bankruptcy will give you additional protections by affording you valuable insight into the documents requested and questions frequently asked by a Portland chapter 7 trustee. You can find a nationally certified Portland Bankruptcy Attorney familiar with consumer bankruptcy cases by following this link.
The chapter 7 trustee is NOT a Judge and does NOT have authority on his own to order you to do anything. However, since you have a duty to cooperate with the Trustee, if you fail to cooperate the Trustee will ask the Judge to Order you. Trustee’s are not always right and sometimes can be overzealous – another reason why hiring the right bankruptcy attorney, especially one who is familiar with the bankruptcy practice in Portland, is a wise decision.
The Difference Between Chapter 7 and Chapter 13 Trustees
A Trustee is also appointed in a chapter 13 bankruptcy case filed in Oregon. However, the chapter 13 Trustee does not have all the same powers as a chapter 7 Trustee. This is because the Debtor is given certain powers in chapter 13 that are normally exercised by a chapter 7 Trustee. That is why at our office we really emphasize “control” as the difference between chapter 7 and chapter 13. If you want to have more control over the process, then you file for chapter 13 bankruptcy. If you are confident that you have no assets which a chapter 7 trustee could take, then perhaps control is not important to you and a chapter 7 bankruptcy will be the right solution for you.
For more information or to schedule a consultation, call us today or fill out the intake form.