Chapter 13 Trustee

Typically, people file for bankruptcy whenever they can no longer pay for all of their debts. There are two types of bankruptcy in the country and both serve different purposes. The Chapter 7 Bankruptcy calls for the liquidation of assets while a Chapter 13 Bankruptcy is the reorganization of payments. In both types of Bankruptcy, a trustee is required so as to facilitate the claim. So just what is Chapter 13 Trustee and what are their roles in the petition and payment plan?

Chapter 13 Trustee

Primary Role in the Case

A bankruptcy trustee is an entity or person who is in charge of administering the bankruptcy petition. It is a person appointed either by the United States Department of Justice or the creditors of the bankruptcy case. For the reorganization of the debt, they are responsible for receiving the monthly payments. They are also the one responsible for distributing the funds to the creditors. They are neither for nor against the debtor as they are the immediate intermediary so as to guarantee that both the debtors and creditors best interests are met.

Examining and Reviewing

All of the paperwork that is required for filing a Chapter 13 Bankruptcy must also be given to the trustee. They are then tasked to review and examine the whole petition as well as the repayment plan. A trustee must ensure that your income calculations are accurate while keeping your expenses reasonable. Since they are also acting in behalf of the creditors, the trustee must make sure that the repayment plan is also fair to your creditors.

They can ask for added documentation and even ask for revisions or raise objections. It is important to talk it out with the trustee to reach an agreeable compromise. If a resolution can’t be reached, then the two sides can talk it out in front of a judge who will act as an arbiter.

Administering the Payment Plan

There are many cases wherein the debtor doesn’t even see the judge but you will always have to see your debtor, especially when it comes to the meeting of creditors or 341 hearing. The trustee will be the one to oversee the hearing and ask relevant questions. The trustee will also need to make sure that the debtor is contributing all of their disposable income to the plan. If, within the repayment plan, the debtor’s property or income increases, then they will also seek to amend the plan so as to increase the percentage of payment.

Other Responsibilities

It might seem that the Chapter 13 Trustee is always acting in behalf of the creditors and is against the debtors, but they are merely enforcing fair and just actions in accordance with the bankruptcy law. They also provide financial advice and are active in in helping you modify the reorganization plans. They are your confidante and will help you through any hearing and meetings needed for the bankruptcy petition. Although they can’t give legal advice, they can assist in whatever means needed to help you, the debtor, get back on track.