Bankruptcy Trustee in New York

In New York, when a person files Chapter 7 or Chapter 13, the court appoints a bankruptcy trustee who administers the debtor’s bankruptcy estate. The trustee may be a government employee, part of the US Department of Justice, or a private self-employed individual. To become a trustee, qualified applicants normally have a college degree and at least 5 years of relevant work experience in fields of tax, accounting, or credit counseling.

The trustee oversees Chapter 7 and Chapter 13 bankruptcy cases in New York. The trustee needs to undergo a criminal background check and be fingerprinted. The court wants to make sure that the trustee does not steal from the debtor when handling the bankruptcy estate. The trustee needs to have a clean credit record and not filed bankruptcy in the past 7 years. The trustee needs to be bonded. Usually, during the first year as a trustee, the person pays for the bond, but after the first year, the bond payments may come from the bankruptcy estates the trustee works on. Being bonded means ensuring certain court rules are followed, and if they are not followed, the trustee forfeits the bond.

The trustee reviews cases for abuse, fraud, or discharge denial. The court listens to the recommendations of the trustee, and during confirmation hearings and status conferences, the trustee may be in control of proceedings and the debtor’s financial future. In a Chapter 7, the trustee liquidates the nonexempt property and distributes it according to the priorities in the Bankruptcy Code. The debtor does not lose everything when s/he files bankruptcy. The debtor gets to keep exempt property. In the bankruptcy petition, the debtor needs to list everything in the schedules that s/he owns, but there is a schedule for the debtor to list the exempt property. For example, retirement accounts are considered exempt.

The trustee leads 341 Hearings, the creditors meeting, and considers whether there are preferences or fraudulent transfers that can be recovered from the debtor to pay off creditors. In a Chapter 13 bankruptcy, the trustee goes over the debtor’s plan, and distributes payments made by the debtor to creditors on a monthly basis. Trustees get paid depending on the debtor assets liquidated. The trustee may have a team of professionals, such as accountants and lawyers. The team gets paid from the bankruptcy estate, but all work for the creditors.

Top Tax Lawyer NYC Articles

Browse our collection of expert articles pertaining to new york sales tax, ny state tax refund, 
ny state income tax, and other
tax in new york topics.

Miami Florida Tax Articles

Florida Tax Guide Is Social Security Taxed in Florida Federal Tax Benefits of Retiring in the State

Florida Tax Guide: Is Social Security Taxed in Florida? Federal Tax Benefits of Retiring in the State of Florida 2023

Social Security benefits serve as a vital source of income for many retirees. As individuals near their golden years, understanding the nuances of Social Security taxation becomes crucial. In this

September 11, 2023
Florida Tax Information for Taxpayers and Tax Professionals Do I Need to File State Income Taxes in

Florida Tax Information for Taxpayers and Tax Professionals: Do I Need to File State Income Taxes in Florida? Role of Florida Department of Revenue

Are you a resident of the Sunshine State wondering about your state tax obligations? Understanding whether you need to file state taxes in Florida is essential to ensure compliance with

August 28, 2023
Florida State Tax Rate Is There An Income Tax in Florida Everything You Need To Know About Fl ()

Florida State Tax Rate 2023: Is There An Income Tax in Florida? Everything You Need To Know About Florida Tax. Florida Income Tax Calculator

In a world where state income taxes are the norm, Florida stands out as a haven for residents seeking a reprieve from this financial burden. The Sunshine State has gained

August 18, 2023

Have More Questions?

If you have not found the Tax & Accounting answers you are looking for, feel free to search here and browse our article catalog!