While lawyers and judges are the ultimate legal experts, of course, I believe that every citizen should take the time to learn a little about law for several reasons. First, it is important to know your rights, and knowing them can come in handy if anyone ever accuses you of a crime you didn't commit or threatens you legally in another other way. Second, learning about your local, state, and federal laws can help you act as a better citizen. When election time comes around, you can then truly understand ever change in law being proposed by a candidate and whether it benefits society or not. I plan to share posts about law topics explained in plain English on my new blog, so you can come back often to sharpen your legal knowledge!
It's easy to feel a bit overwhelmed when you first think about declaring bankruptcy; and it is undoubtedly a major financial and legal action. Knowing what to expect during the process tends to make filers more relaxed, which fits in nicely with the relief of having those creditors off your back. You will be dealing with a central figure when it comes to your chapter 7 bankruptcy, so read on to learn a bit more about your possible interactions with the trustee, and, interestingly enough, how they are paid.
The Creditor's Meeting
In most cases, this is the only time that you will actually meet your bankruptcy trustee face-to-face. You will have probably seen their names on some of your bankruptcy paperwork received up to now, however. This meeting and the reason behind it can seem scary to most filers, but once you realize how quick and easy it will be, you will realize that you likely have nothing to be so worried about.
Many trustees are actually judges, retired judges or attorneys, and the meeting will take place in a federal building of some sort, either a courtroom or large conference room. You won't be alone; not only will your bankruptcy attorney be there but many other bankruptcy filers with the same date and time appointment are scheduled to be there with you.
While there is always the possibility that one of your creditors will attend this meeting, that is actually quite rare. If one does attend, you will be given a "heads up" by your attorney and be prepared to answer any questions about your credit card use prior to filing. Usually, however, your time in front of the bankruptcy trustee should be no more than 2 or 3 minutes at the most.
The Trustee's Pay
You may be surprised to learn that the salary amount and the way the trustee gets paid is something that all bankruptcy filers should be aware of. The trustee actually earns a commission on how much property they are able to seize and sell to help pay off creditors. This means that the amount of interest your trustee shows in your bankruptcy is in direct proportion to the amount of your property that could be on the line.
That does not mean that you will automatically lose property with a bankruptcy filing, however. State and federal exemptions allows filers to deduct some of the value of their belongings, such as homes, cars and personal belongings so that they can keep them. In general, the trustee gets about 25% of the first $5,000 of property, 10% of the next $5,000 up to $50,000 and 5% after that. The trustee also earns a flat $60.00 per case, no matter what.
To learn more, speak with a bankruptcy attorney at a law firm.