While filing for bankruptcy is a legal process that involved the Bankruptcy Court, few petitioners ever get to see a bankruptcy judge. Once you have filed your bankruptcy  petition, the paperwork makes its way to a bankruptcy trustee. It is their job to manage the bankruptcy process all the way though to its conclusion. While we often discuss what a trustee does in bankruptcy, we rarely discuss who they are.

There are three different trustees in bankruptcy. Bankruptcy are, in theory, managed by the United States Trustee. There are 21 regional centers across the country, each controlled by a U.S. Trustee. Your petition is passed on from the U.S. Trustee to either a Standing or Interim Trustee.

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I often get calls from people who have already filed personal bankruptcy with another attorney and are unhappy about the course of their bankruptcy. Many of these callers find they are losing some money or assets in their bankruptcy, and they complain that their attorney did not warn them that the these assets would be at risk. In most of these situations involve people who, in my opinion, should never have filed bankruptcy.

I’ve written before on this blog that Florida law provides more asset exemptions and protections outside of bankruptcy than it does within the bankruptcy context. For example, homestead property, marital property and certain business interests lose protections in bankruptcy court. .

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According to the National Bankruptcy Research Center, more than 1.3 million bankruptcies were filed in 2011, or about one for every 175 American adults. We all know the economy is bad, jobs are scarce, and the housing market is still poor. But what may surprise you is what causes an individual to file for bankruptcy protection.

#5: Unexpected Expenses

A catastrophic event can push a person to file bankruptcy. You can lose everything to a fire, flood, or a tornado, and an “act of god” can break your finances. Insurance does not always cover everything needed to make a person whole again, and sometimes there are associated expenses not covered by insurance. Lik

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Placing assets into a trust is not always an effective means of protecting those assets from creditors, or, thereby, from the asset liquidation power of Chapter 7 Bankruptcy Trustees.

As Ive written here before, a Chapter 7 Bankruptcy is a liquidation bankruptcy both in that your debt is liquidated, or discharged, and in that there is a possibility that your assets will be liquidated during the bankruptcy process. A Trustee assigned to your Chapter 7 Bankruptcy case by the Bankruptcy Court has the duty of seizing and liquidating personal assets that are valued above the limits of the protective exemptions provided by the Bankruptcy Code statute.

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