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Who is the Trustee in My Bankruptcy Case?

In order to better administer bankruptcy cases, the Bankruptcy Reform Act of 1978 created the US Trustee program. The US Trustee program is under the Department of Justice and the US Trustee in charge of the program is appointed by the Attorney General. There are 48 states that use the US Trustee program to administer their bankruptcy cases. (Alabama and North Carolina do not participate in the program).

In chapters 7 or 13 cases, an Interim Trustee is appointed to administer the bankruptcy case.  In the different chapters, the Trustees serve slightly different roles:

In a chapter 7 case, the Trustee is primarily charged with insuring that all non-exempt assets are liquidated and that the proceeds are used to pay creditors. The chapter 7 Trustee will step into the shoes of the debtor and is able to sell the non-exempt assets in place of the debtor. It is important to note that in most consumer cases, there are rarely any assets to liquidate; therefore, the Trustee reviews the petition and conducts the meeting of creditors to insure that all property has been listed and has been properly exempted.

In a chapter 13 case, the Trustee is primarily charged with receiving the debtor’s monthly plan payment and then distributing the payment to the debtor’s creditors. The chapter 13 Trustee reviews the debtor’s petition and conducts the 341 meeting of creditors. The Trustee wants to ensure that the debtor is pledging all of their disposable income to their chapter 13 plan.

It is important to understand the role of the Trustee in your case. The Trustee is an attorney who is opposing counsel, which means that they are not on the side of the debtor. They are also not on the creditor’s side, either. The Trustee usually acts as a referee and makes sure that both sides play fair, under the rules in the bankruptcy code. For more information about bankruptcy Trustees, or about filing a case, contact the successful attorneys at Fears Nachawati Law Firm here or call our office at 1.866.705.7584 for a free consultation.

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