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Know the Players in Your Bankruptcy

By 1929 baseball’s New York Yankees had won six pennants and were entering the season as the reigning World Series Champions. They were also baseball’s most popular team, with sluggers Lou Gehrig, Tony Lazerri, and the great Babe Ruth. Ruth was so popular that when the Yankees visited other cities, children would line up to sit near him in right field, Ruth’s position. Children would ridicule an unknowledgeable Ruth fan who bought the wrong ticket by saying, “He’s out in left field!” That saying and its meaning survives today.

The 1929 Yankees are notable because they popularized the wearing of uniform numbers; a practice that other teams soon followed. To match the player’s name to his number, you needed a program.

In bankruptcy, as in baseball, there are a lot of players and they all have special names for identification. Your attorney, the bankruptcy judge, the trustee, and any creditors will refer to these names, so you need a guide to identify the players in the bankruptcy game.
The bankruptcy debtor is simply the person who filed the bankruptcy case. There may be one or two debtors in the case who may be referred to as joint debtors or co-debtors.

A creditor is a person or company to whom the debtor owes money. It has nothing to do with credit or credit cards. If you owe your mother for a small personal loan, she is a creditor in your bankruptcy case. Common creditors in a bankruptcy case include the IRS, an auto finance company, or a home mortgage company.

The bankruptcy trustee is a person (usually a licensed attorney or CPA) who is assigned to supervise the administration of your case. In a Chapter 13, the bankruptcy trustee is always the same person, but there may be assistant trustees who work for him or her. In a Chapter 7 case, the bankruptcy trustee is an individual who is contracted by the Department of Justice to oversee the case. It is the trustee’s primary responsibility to ensure that the debtor is not defrauding creditors, or hiding income or assets during the bankruptcy.

Bankruptcy Judge
A federal judge is assigned to every bankruptcy case, but it is rare that a debtor sees the judge. Bankruptcy judges have enormous caseloads, so the judge relies on the trustee, creditors, and the debtor’s attorney to bring issues or problems to the judge’s attention.

Your Attorney
Since the creditor is working for its own interest, the trustee is working to promote justice, and the judge is neutral, who is in your corner?

Your bankruptcy attorney works for you. Your attorney is there to guide you through the bankruptcy process and ensure that you receive the relief you need. Consequently, you should work closely and honestly with your attorney.

Knowing the players in a bankruptcy case is not hard, but requires a little study. As the saying goes, “you can’t tell the players without a program.” This article gives you an inside perspective of the participants in your bankruptcy case and their individual roles.