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The Role of a Trustee in Bankruptcy
The role of the Trustee in a Bankruptcy
A Trustee is appointed when an individual cannot pay their debts.
The role of a Trustee in bankruptcy is to investigate the affairs, assets and liabilities of the Bankrupt to (where possible) declare a dividend to creditors of the bankrupt estate.
When a person that is bankrupt, is unable to prepare a proper statement of affairs, the trustee may appoint a qualified person, at the expense of the estate, to help prepare the statement of affairs.We regularly assist in this respect.
Among other things, the Trustee in bankruptcy has the following duties and obligations (non-exhaustive list):
The Trustee must notify the creditors of the bankruptcy that the person has been declared bankrupt – the purpose of this is to prevent further adverse action being taken against the individual in respect of pre-appointment debts;
The duty to notify the creditors within three months of bankruptcy as to whether or not they will be reimbursed with any payments owing to them;
If a creditor has any questions about the administration, they have a duty to supply the information to creditors;
They have a duty to determine whether or not the estate includes property that can be sold to pay creditors (i.e. does the Bankrupt have an equitable interest in any real property (family home));
Determine whether or not the bankrupt has transferred any property or money from the account, which would otherwise satisfy creditors debts, which may be voidable and subject to recovery actions;
The Trustee ensures that appropriate steps are taken to recover any property which the bankrupt may be entitled to for the estate’s benefit;
The Trustee must ensure that the bankrupt discharges all of the bankrupt’s duties;
They have a duty to consider whether or not the bankrupt has committed any offences and report those offences to AFSA;
Refer to law enforcement authorities any evidence of illegal conduct or activity which the bankrupt may have taken (i.e. fraud); and
Administer the estate at minimal expense to creditors to ensure a sufficient dividend is declared (where possible).
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