Arizona residents considering filing for bankruptcy may be aware some of their assets are sold during the Chapter 7 bankruptcy proceeding in order to generate money to pay creditors, but they may not be clear about who does this and the whole procedure. These duties come under the purview of the United States Trustee program and are further delegated to private trustees.
The United States Trustee program is a branch of the Department of Justice and its aim is to protect the integrity and promote the efficiency of the bankruptcy program. It does so by overlooking the conduct of parties declaring bankruptcy and private estate trustees to ensure compliance with the necessary laws and procedures.
A private trustee is appointed by the United States Trustee to oversee bankruptcy proceedings, including Chapter 7 and Chapter 13 bankruptcies. These private trustees are then monitored by the US Trustee and in case the private trustee is unable to serve their duties, the US Trustee steps in to do their job.
In Chapter 7 bankruptcy, assets that are not exempt from creditors are collected by the trustee and then liquidated-reduced to money-in order to fulfill creditor's bills. The private trustee disburses the collected money to the creditors and generally administers the debtor's estate during the bankruptcy.
Understanding what's going on during the bankruptcy proceedings is very important for Arizona residents, as it allows them to know who is going to be dealing with their assets and how a portion of their debt is going to be fulfilled. Arizona residents may not be aware that there is a very long list of exemptions available to them if they choose to declare bankruptcy-they may be able to retain a lot of their possessions if they declare bankruptcy and also manage to get in control of their finances at the same time.
Source: United States Department of Justice, "About the Uniteed States Trustee Program & Bankruptcy," Accessed April 6, 2015
