If you’re filing for bankruptcy, you’ll inevitably come into contact with a bankruptcy trustee. But who exactly is this person, and what role do they play in your bankruptcy case? Understanding the trustee’s responsibilities can help alleviate any confusion or concern as you navigate the bankruptcy process.

We’ll explain who the bankruptcy trustee is, what they do, and what you can expect when interacting with them during your case.

Who is a Bankruptcy Trustee?

A bankruptcy trustee is an individual appointed by the U.S. Trustee, a branch of the Department of Justice, to manage and oversee bankruptcy cases. They are neutral parties who act on behalf of your bankruptcy estate, ensuring that the process is conducted fairly and in compliance with the law. Trustees play a crucial role in both Chapter 7 and Chapter 13 bankruptcy cases.

  • Role of the U.S. Trustee: The U.S. Trustee supervises bankruptcy cases to ensure proper adherence to the Bankruptcy Code. They oversee the trustees who are assigned to each case, ensuring they perform their duties in accordance with the law.
  • Regional Divisions: The U.S. Trustee operates across the U.S. in 21 regions. Kansas is part of Region 20, with the regional office based in Wichita, while Missouri is part of Region 13, with an office in Kansas City.

What Does a Bankruptcy Trustee Do?

While trustees are responsible for a variety of tasks, their main duties revolve around ensuring that the bankruptcy case proceeds smoothly and that creditors are treated fairly. Here’s what a bankruptcy trustee will typically do in your case:

Chapter 7 Trustee:

  • Asset Evaluation: In a Chapter 7 case, the trustee will evaluate your assets to determine whether any of them are non-exempt and can be liquidated to pay creditors.
  • Liquidation: If there are non-exempt assets, the trustee may sell them to distribute the proceeds to creditors.
  • Review of Bankruptcy Schedules: The trustee will carefully review your bankruptcy petition, schedules, and statements to ensure they are accurate and complete.

Chapter 13 Trustee:

  • Plan Review and Approval: For Chapter 13 cases, the trustee evaluates the proposed repayment plan, checking for any potential issues that might prevent it from being confirmed by the court.
  • Receiving Payments: The trustee is responsible for collecting your monthly plan payments and distributing them to creditors according to the approved plan.
  • Ongoing Monitoring: The trustee ensures you comply with the terms of your repayment plan throughout the duration of your Chapter 13 bankruptcy.

What a Bankruptcy Trustee Does NOT Do

It’s important to understand the role of the trustee so you can avoid unnecessary anxiety during your bankruptcy case. Here are a few things a trustee will not do:

  • Judge Your Situation: The trustee is not there to pass judgment on you. Their job is to review your bankruptcy case for completeness and legal compliance, not to criticize or belittle you.
  • Provide Legal Advice: Trustees are not your attorney and cannot give you legal advice. They are simply there to ensure the process is handled correctly.
  • Resolve Your Debts Directly: The trustee doesn’t make decisions about which of your debts will be discharged. That’s determined by the bankruptcy court.

The 341 Meeting of Creditors and Your Interaction with the Trustee

One of the key moments where you’ll interact with the bankruptcy trustee is the 341 meeting, also called the meeting of creditors. Here, the trustee will ask you questions about your case to confirm your financial information and the accuracy of your bankruptcy filings. They may ask for clarifications, but they are not there to intimidate you.

Remember: The trustee’s main role is to gather information and ensure the bankruptcy process is being followed correctly.

Common Questions You Might Have About the Trustee:

  • Will the trustee judge me for filing bankruptcy? No, the trustee’s job is to review your case. They will not pass judgment on your financial struggles.
  • What happens if I don’t have enough non-exempt assets for the trustee to liquidate? If there are no non-exempt assets, the trustee may close your case without any asset liquidation.
  • How do I know if my assets are exempt? Your attorney will help you understand what assets are exempt under Kansas or Missouri bankruptcy laws, so you can retain as much property as possible.

Conclusion: The Trustee’s Role is to Help, Not Hurt

The bankruptcy trustee plays an essential role in ensuring the bankruptcy process runs smoothly, but their main goal is to ensure fairness, transparency, and compliance with the law. They are not there to make your life difficult but to ensure that creditors are treated equitably and that the process remains free of fraud.

If you have any concerns about your bankruptcy case or how to navigate your trustee meeting, it’s important to consult with a knowledgeable bankruptcy attorney who can guide you every step of the way.

Thinking about filing for bankruptcy and need guidance on how the trustee fits into the process? Contact us today for a free consultation and let us help you prepare for every step of the bankruptcy journey.