For Pittsburgh residents who are considered wage-earners and have property that they would like to retain but are in heavy debt with no viable alternatives to pay it, Chapter 13 bankruptcy may be a useful option to get back on stronger financial footing. There are many aspects of a Chapter 13 filing that should be gauged before moving forward with it. One that is not overtly problematic, but should be understood is the role of the Chapter 13 trustee. The trustee is integral to the success of the filing and cannot be ignored.
In general, the trustee oversees the bankruptcy. Whereas a Chapter 7 bankruptcy -- also referred to as a liquidation bankruptcy -- requires that property with any value the debtor has will be sold to pay back creditors, a Chapter 13 is a reorganization bankruptcy that allows the debtor to retain such properties. That can include a car or a home. With that, the trustee will essentially be tasked with receiving the monthly payments from the debtor over the three or five years for which the payment plan lasts and then distributing these funds to the creditors.
The trustee will review the payment plan that the debtor has proposed. If there are issues, then the trustee will make objections regarding the plan. The payments will be sent to the trustee at the predetermined time. Those payments will then be distributed to the creditors. These requirements make the job of the trustee an integral part of a case. The trustee is a neutral party who will handle any issue the debtors, creditors or anyone else involved with the case might have.
With Chapter 13, understanding the various aspects of the filing is important when the debtor decides that it is the preferable alternative to clear their debts and retain their property. However, it is crucial to have professional guidance from the start, to increase your chances of successfully navigating your Chapter 13 bankruptcy filing.