When you file for Chapter 13 bankruptcy in New Jersey, you can expect to deal with a trustee throughout much of the process. The duties of a trustee are going to be different depending on the type of bankruptcy. Under Chapter 7 bankruptcy, per FindLaw, the trustee would be handling the liquidation of the debtor’s property and paying the creditors the proceeds. But since Chapter 13 bankruptcy does not involve liquidation, the duties of a trustee under Chapter 13 will be different. Instead, you can expect a Chapter 13 trustee to primarily be concerned with taking care of your debt payments.
Once you have completed a plan to repay your creditors, the trustee will look over it. If the trustee has any problems with the plan, the trustee will bring these objections to your attention. Afterwards, when the plan is ready, it will be submitted to the bankruptcy court for approval. Once the repayment plan is approved, the trustee will take charge of receiving money from you, which will be distributed to your creditors according to the conditions of the plan.
The U.S. Courts website states that to increase the odds that your repayment plan will be approved by the court, you should consult closely with your trustee. At some point in the initial bankruptcy process before the repayment plan is presented to a judge, your trustee will hold a meeting with you and your creditors to work out your planned repayment and answer questions about your finances. During this meeting, the trustee will place you under oath to answer questions from your creditors or the trustee. This process can go more smoothly if you run through the plan with the trustee before the meeting.
Additionally, a major benefit of Chapter 13 bankruptcy is that it effectively separates you from your creditors. While you are under Chapter 13 protection, you will not have direct contact with parties that you owe money to. Once the repayment plan is set in place, you pay your trustee, not the creditors. The trustee will send the money along to the creditors for you.