One reason that people get into trouble with debt is the exorbitant interest rate found on, for example, some credit cards. If the interest rate on the only credit card someone can qualify for is 20 or 30 percent, it’s easy to end up making minimum payments and reducing the principal balance by barely a few dollars a month. That basically means the debt will never be paid off. Hence the need to file for bankruptcy.
In general, Trustees have different duties in Chapter 7 vs. Chapter 13 bankruptcy cases. Before we get to those differences, though, let’s cover some basics about Trustees. Bankruptcy trustees are almost always appointed in consumer bankruptcy cases. The trustee will have a variety of obligations and powers depending on the case as well as the circumstances of a particular debtor and their creditors. In addition, the trustee may be an attorney but does not have to be. In fact, many trustees are accountants, which is a plus because their skill set is well suited to handling their duties. While the bankruptcy court appoints the trustee, it is actually the office of the United States trustee —a branch of the Department of Justice — that oversees their performance.
Tips and Tactics From The Leading Los Angeles-area Bankruptcy Attorney
People have many legitimate reasons to find themselves struggling with debt. When that occurs, it’s natural to start thinking of every type of solution to the problem. One solution is filing for bankruptcy, which is a process designed to help people reorganize their lives to cope with the debt and get back on their feet. But when the problems are overwhelming, it’s hard to know how to begin to solve the problem. It’s easy to simply say, “Bankruptcy! I don’t even know where to start!”
When you borrow money to buy a house or car, that property generally serves as collateral for the debt you owe. That is, you don’t truly own the property until you pay off the debt, and if you stop paying on the loan then more than likely a process will begin that ends with you giving your property back. If you file for Chapter 7 bankruptcy and owe money on property that serves as collateral, then you will need to choose one of three ways to handle that debt.