The Bankruptcy Trustee Is Not Your Friend
“ Be warned that the bankruptcy trustee is the prosecutor, the judge and the jury all rolled into one.”
Let me ask you this question. If you were faced with a criminal offence, would you face the prosecutor, the judge and the jury alone? Probably, not! You would go to court in the company of a good lawyer. Similarly, if you are faced with debt problems and you are considering declaring bankruptcy, or a proposal to your creditors, it is not a good idea to face the trustee alone. Be warned that the bankruptcy trustee is the prosecutor, the judge and the jury all rolled into one. He works for the Bank and not for you.
A bankruptcy trustee is appointed by the bankruptcy court to oversee the bankruptcy of an individual or a business. The duties of the bankruptcy trustee include:
• Collecting and selling assets
• Paying off creditors with the assets in order of priority class.
• In a Chapter 11 Reorganization, to operate the business so as to preserve the value of business assets
• To make periodic reports to the court on the progress of the bankruptcy.
A bankruptcy trustee, like other trustees, has a fiduciary duty to be responsible for the funds under his/her care.
A friend of mine from the Bahamas went to a bankruptcy trustee to declare bankruptcy. The Trustee was very nice to him in the information gathering stage to such an extent that he felt he and the trustee were friends. “What’s your name, job, income, RRSPs, homeowner and so on? In the process the trustee found out that my friend was from the Bahamas. “Oh, you are from the Bahamas? The trustee queried. I hear it is a beautiful place. I would like to visit there someday” “Oh, Yes. I’m from the Bahamas and it is a beautiful place. I own a nice home on the beach. You may stay there for free if and when you visit.” My friend proudly answered.
Before my friend realized, his beach-home in the Bahamas was sold to pay off his debts in Canada.
If you are having debt problems, call me at 416-398-1877 ext 201.
I will help you face them squarely and resolve them.
Ken Ntiamoa, MBA
BIA Insolvency Counsellor