Who is the Bankruptcy Trustee?

The bankruptcy trustee plays an important role in both the Chapter 7 and Chapter 13 process and is the person who protects the interests of the creditors in bankruptcy. In Atlanta, there are many different trustees for Chapter 7 and Chapter 13 cases, and there is no way of knowing who your bankruptcy trustee will be until you actually file the bankruptcy petition.

Generally, a Chapter 7 or Chapter 13 trustee is an attorney or accountant, appointed by the government-employed United States’ Trustees, who administers a bankruptcy case. The trustee normally has a staff, including attorneys, who help him or her with the administration process.

The first and most important thing that debtors who file for bankruptcy need to know is that the bankruptcy trustee does not work for or represent them, the bankruptcy trustee represents and protects the interests of the creditors. If you are represented by an attorney (always a good idea in a bankruptcy) and have a question about your bankruptcy or your financial situation do not call the trustee’s office, contact your own attorney!

A trustee’s role differs in Chapter 7 and Chapter 13. In a Chapter 7 bankruptcy, the trustee has the responsibility of examining your assets and determining whether the assets should be subject to sale or liquidation in order to pay back creditors. The Chapter 7 trustee attends the meeting of creditors (also known as 341 meetings) and issues a report about whether a debtor has any non-exempt equity in property that can be liquidated for the purpose of repaying creditors.

A Chapter 13 bankruptcy trustee evaluates the filer’s payment plan (protecting the creditors by making sure that the plan is feasible and adequately pays creditors) and administers that plan for up to five years. That is, the trustee receives payments from debtors and disburses those payments to the creditors according to the Chapter 13 plan. Thus, a Chapter 13 debtor makes his payments to creditors by mailing one payment directly to the Chapter 13 trustee.

The next question you may have is–how does the trustee get paid? You probably already know part of the answer. In a Chapter 13 case, the debtor pays an administration fee, which is a fixed percentage, to the trustee through his or her monthly payment. In a Chapter 7 case, the trustee receives a portion of the filing fee and also receives a commission if he or she is able to sell assets related to the case.

If you are considering filing for bankruptcy it is important that you have an experienced attorney to help you navigate the process and advocate on your behalf. For a free consultation please contact the Law Offices of Charles Clapp at (404) 585-0040 or email info@lawcmc.com for more information.