If you have declared bankruptcy, you likely already know that your case is assigned a bankruptcy trustee. What you probably don't know, however, is exactly what kind of powers this trustee has and the relationship between your property and the trustee's compensation. These officials are usually judges, but sometimes they are attorneys with bankruptcy experience who have been appointed to oversee bankruptcies. Having a complete understanding of their role in your bankruptcy is vital, so read on.

Property Inspection

While you expect that your first encounter with the trustee will be at the creditor's meeting, you may have contact as early as a few weeks after your filing. The trustee, or their representative, will actually visit your home or the location of your property (such as a boat slip, a rental property, etc.) and inspect it for resale value. The trustee's pay is contingent on what is found at this inspection, so you can expect photographs and sometimes video to be taken and used to compare the valuation with your estimate contained in your initial bankruptcy petition.

What to Know About This Visit

• You will have plenty of notice: no one will just show up unannounced.
• Nothing will be taken from you at the time of the visit; arrangements for that will be made separately.
• You may not encounter this visit at all if you don't have much eligible property.

The Trustee's Compensation

The amount of pay the trustee receives for handling your bankruptcy case is set by federal law, which oversees all bankruptcy cases. The calculation is based on a commission, or percentage of value, of all property seized. The law allows the trustee to earn 25% on the first $5,000, 10% for $5,000 - $50,000 and 5% for $50,000-$1,000,000. This may have you wondering how the trustee gets paid if there is no property seized, but don't worry, the trustee also earns $60 a case. This fee ads up quickly when you consider that you will be alongside 25 other people for the one of two daily sessions at the creditor's meeting.

The Creditor's Meeting

The only other time you will encounter your trustee will likely be at this meeting, where you will stand and swear that your petition is truthful and where your creditors have an opportunity to appear and object. Creditors seldom appear at these meetings, and your time with the trustee will probably be over in a matter of minutes.

After reading the above, it will become quite obvious why you must be completely honest about your property when filling out your petition paperwork. You likely have nothing to fear from the trustee, but consult with your bankruptcy attorney for more information about this process and the trustee's role in your bankruptcy.

Speak with professionals such as Shoemaker & Dart P.S. Inc to learn more.