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From Executive Director
In simple terms, the Chapter 13 trustee is the person who handles your case when you file bankruptcy under Chapter 13. The most visible part of a bankruptcy chapter 13 trustee’s job is to receive monthly payments from you and then disburse the money to your creditors. But the job of the bankruptcy trustee is broader and involves much more.
What Is A Chapter 13 Trustee
When you file Chapter 13 bankruptcy, all of your property becomes known as the “estate”. This includes all legal or equitable interest that you have in property as well any and all interest that you have in property that is being held for you by someone else. You keep possession of the your estate property, but you are not allowed to dispose of, transfer, convey, mortgage, or otherwise deal with any of the estate property.
Someone has to oversee your estate property, make sure that you pay the monthly payments pursuant to your Chapter 13 plan, disburse monthly payments to your creditors, and see that your bankruptcy case is properly administered. So, a Chapter 13 bankruptcy trustee is appointed.
It should be pointed out that there is a difference between the United States trustee and the Chapter 13 trustee who is also known as the Chapter 13 bankruptcy trustee and bankruptcy trustee. The United States trustee is a government employee and oversees and supervises the trustee’s side of bankruptcy. The United States trustee (or in Alabama and North Carolina, the bankruptcy court) appoints a Chapter 13 bankruptcy trustee who is an impartial private individual and not a government employee.
What Does A Chapter 13 Trustee Do
By law the bankruptcy Chapter 13 trustee is required to:
- Be accountable for all property received by the trustee,
- Ensure that you perform your intentions as set forth in your Chapter 13 plan,
- Investigate and verify your financial affairs,
- Examine proofs of claims and object to the allowance of any claim that is improper,
- Furnish such information concerning the estate and the estate’s administration as is requested by a party in interest, unless the court orders otherwise,
- Appear at and be heard at any Court hearing that concerns:
- Valuation of property subject to a lien,
- Confirmation of a proposed Chapter 13 plan, and
- Modification of a Chapter 13 plan after it has been confirmed by the bankruptcy Court,
- Disburse and dispose of moneys received or to be received by the trustee pursuant to
regulations issued by the Director of the Administrative Office of the United States Courts,
- Advise and assist you in your performance under your plan, but not give legal advice,
- Ensure that you begin making timely payments under your plan and that you continue to make the monthly payments,
- If advisable, oppose your bankruptcy discharge,
- Make a final report and file a final account of the administration of the estate with the court and with the United States trustee, and
- And if there is a claim for a domestic support obligation in your case, the bankruptcy trustee is required to take certain actions.
The Chapter 13 trustee accomplishes the above requirements as your bankruptcy progresses through the process.
First, after you file your petition and your proposed Chapter 13 repayment plan, the Chapter 13 trustee will review the documents that you have filed. The trustee may request that you supply additional information.
Next, at the 341 meeting of creditors, the trustee will ask you questions to verify your financial affairs. The trustee will also ask you about your proposed plan to make sure that it is feasible and something that you can accomplish. If there is any question about your ability to make the plan work, the bankruptcy trustee will either make suggestions or direct that you modify your plan to make it more workable.
At the confirmation hearing before the bankruptcy Court, the trustee will inform the judge on whether or not the trustee believes that your proposed plan should be approved. And, if the trustee does not believe your proposed play should be approved, the trustee will tell the Court why.
The Chapter 13 bankruptcy trustee will receive you monthly payments and disburse the money to your creditors. If you fail to begin making the monthly payments or if stop making the monthly payments, the trustee will inform the bankruptcy Court.
The bankruptcy Chapter 13 trustee will attend any bankruptcy Court hearing that concerns your bankruptcy (such as a hearing on a property valuation motion) and inform the Court of the trustee’s position on the matter before the Court.
If necessary, the bankruptcy trustee may object to your receiving a discharge in you bankruptcy. Also, if your bankruptcy involves child support obligations or payments, the Chapter 13 trustee will have to take certain actions to make sure that the people and governmental agencies that may be involved are aware of the bankruptcy and the termination of the bankruptcy.
Finally, the Chapter 13 trustee will file with the bankruptcy Court and the United States trustee both an accounting for all moneys that the trustee received and a report on the administration of your bankruptcy.
This is general information only. If you have any questions whatsoever, talk with a lawyer licensed in your state who has experience with Chapter 7 bankruptcy, Chapter 13 bankruptcy, or bankruptcy in general.
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