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The trustee plays an important role in a Chapter 13 bankruptcy

The decision to file for bankruptcy is a personal one. Not every Kentucky resident faces the same financial difficulties; therefore, no situation is exactly the same. As one is deciding if bankruptcy is the best option, it is also a good idea to take a look at the types of bankruptcy available. Depending upon the financial circumstances, the individual may need to liquidate assets or may need to restructure debts. When the problems can be resolved by restructuring debts, Chapter 13 bankruptcy may be the answer.

Under Chapter 13 bankruptcy, a bankruptcy trustee is appointed to oversee the process. One of the first tasks this trustee is charged with is reviewing the individual proposal for restructuring payments. It is important that this repayment plan takes into account creditors who must be paid and the filer's assets. For example, if the filer is in arrears on mortgage payments but does not want to lose the house, the trustee will review the proposed plan to make sure that mortgage payments already owed can be paid in addition to the new mortgage payments that must be made.

The trustee is also the one who receives the payments made pursuant to the court-approved plan. The restructured payment plan has specific debts and amounts that must be paid. The payments are given to the trustee who then distributes funds to the appropriate creditors.

The trustee plays an important role in a Kentucky resident's Chapter 13 bankruptcy. This is the individual who analyzes claims made by both debtor and creditor as well as challenges anything that needs to change. Consultation with experienced legal counsel is helpful in deciding if Chapter 13 bankruptcy is the appropriate option.

Source: bankruptcy.findlaw.com, "What is a Trustee in Bankruptcy?", Accessed on Jan. 7, 2017

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