Trustees

A trustee is a person appointed by the court or the U.S. Trustee program to manage the bankruptcy process for the debtor's estate. The trustee represents the creditor's interests to ensure a fair and legal bankruptcy and that creditors get as much money back as possible from the bankruptcy estate. Trustees can initiate legal actions against creditors or others to recover property of the bankruptcy estate, including fraudulent transfers or preferences (certain payments made to creditors before bankruptcy).

I have dealt with trustees for 20 years as a Riverside bankruptcy attorney. Whether you file a Chapter 7 or a Chapter 13, I know the details of what the trustees look for and their process to ensure a successful discharge. Each County has its process, and the trustees have slightly different requirements in Riverside, Orange, Los Angeles, and San Diego Counties. Contact me now for a free consultation, and I will tell you more about your County.

U.S. Trustees
The U.S. Trustee Program was established to ensure the integrity and efficiency of the bankruptcy system and stop abuse and fraud. Their duties include Chapter 7 collection and liquidation of non-exempt debtor assets, distribution of proceeds to creditors, and the discharging of debts. During Chapter 13 bankruptcies, these trustees will oversee individual reorganizations under repayment plans, require debtors to prove regular income and debt within limited, and supervise repayment plans. The U.S. will request additional documents when the bankruptcy has unique circumstances requiring additional oversight. While the U.S. Trustee oversees these bankruptcy proceedings, other trustees are appointed to handle the day-to-day bankruptcy operations.

Panel Trustees
Panel trustees are private individuals appointed by the U.S. Trustee to administer Chapter 7 cases. These trustees will run the  341A Meeting of Creditors for Chapter 7 and determine whether there are non-exempt assets for liquidation. During the meeting, the trustee examines the debtor's bankruptcy petition and schedules to ensure accuracy. The panel trustee will sell any assets that are not exempt, and the proceeds will be distributed between unsecured creditors. If the trustee finds non-exempt assets, they will file a Notice of Assets before overseeing the sale and distribution of funds from those assets to creditors. If there are no funds to disperse to creditors, the trustee will file a Report of No Distribution. The trustee is also in charge of dismissing or converting cases when they find that the debtor does not meet the standards for Chapter 7. Finally, they will file a Chapter 7 trustee's Final Report to disclose their finding of the case.

Case Trustees
Case Trustees are in charge of Chapter 13 bankruptcies, which last 3-5 years. These trustees will first run the 341A Meeting of Creditors for Chapter 13, during which they will review your bankruptcy petition and schedules. Based on their findings, they will proceed to the confirmation hearing, where the judge will either confirm your Chapter 13 repayment plan or ask for revisions by objecting to it. The trustee will ensure the debtors start the payment plan, make the planned payments, and modify the plan if circumstances change. The trustee will follow the case and report to the court and the debtor while addressing legal or administrative issues.

These are only some duties trustees have within the scope of filing bankruptcy for individuals. Their duties are different for Chapter 11 bankruptcies, but that is out of the scope of our practice areas. For more information on how to file personal bankruptcy, schedule a free consultation today.