How to liquidating assets
After the Section 341 hearing, the Panel Trustee will object to exemptions that have been improperly claimed.
If the Panel Trustee has a conflict in a specific case, he/she may withdraw by giving notice to the United State Trustee.
Panel Trustee case loads vary between several hundred cases a year to several thousand depending on the location of the Panel Trustee.
The Panel Trustee specifically reviews the debtor's exemption schedules to determine whether the debtor has properly followed the state or federal exemption laws.
The Panel Trustee formulates questions to ask the debtor at the Section 341 hearing regarding the debtor's assets, liabilities, income and expenses.
What are some common reasons for filing a Chapter 7 Bankruptcy? Generally, most assets held by the average debtor are considered to be exempt.
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. Why are Panel Trustees necessary for the Bankruptcy System? Chapter 7 bankruptcy is a liquidation legal proceeding.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.After the bankruptcy petition is filed, the United States Trustee appoints as trustee a disinterested person who is a member of a panel of Chapter7 trustees ("panel trustee") to serve as an interim trustee.The interim trustee serves until a permanent trustee is elected or designated at the Section 341 hearing.Although their obligations are many and varied, the Chapter 7 Trustees’ primary goal is to liquidate assets for the benefit of creditors where possible.