The bankruptcy process is a long and arduous petition that doesn’t end with a simple discharge laid down by the judge. After the petition is granted, the saleable assets are sold and the creditors that need paying are given their rightful share each until all the money have run out.
A US Trustee is essentially involved with the whole process of bankruptcy but their primary function is with the acceptance and distribution of funds. It might seem logical to give this job to the person filing for bankruptcy, but in the interest of fairness and order, the trustee is given this task to make sure that the payment plan is followed to perfection.
United States Trustee Program
The United States Trustee Program is essentially where the judicial department obtains trustees to work on bankruptcy cases. It is a branch of the Department of Justice with members that are expected to follow certain rules and regulations in administering payment plans. Typically, trustees are bankruptcy lawyers or non-lawyers who have gone through special training to fit the job.
Note that US Trustee is necessary in all Bankruptcy Chapters. For Chapter 7 and Chapter 13 bankruptcy however, they are not so easily seen or their impact so heavily felt. When it comes to Chapter 11 however, US Trustees play a vital role that requires them being in the front lines at all times.
Roles of a Trustee
So what exactly does a trustee do? First off, trustees are often required to appear in court to represent the petitioner. Their role however is not entirely for your behalf. Essentially, the trustee works for the judiciary system in ascertaining that the petitioner is adhering to all the rules and regulations prior and after a bankruptcy discharge. That being said, following are some of the roles of a trustee:
- The trustee determines whether your Means Test is accurate. This is a test utilized to determine whether bankruptcy is the right choice for you or if there is substantial abuse of the bankruptcy laws. Depending on their findings, a trustee may oppose a dismissal, agree to it, or recommend that the petitioner opt for a different Chapter;
- Monitor any fees connected with bankruptcy including payments to the attorney;
- Trustees are also in the position of hiring 3rd parties to perform crucial jobs related to the proper execution of the bankruptcy proceedings. Hiring decisions are noted and made transparent to justify any expenses connected with the case;
- Meets up with creditors and provides a good summary of the situation, presenting facts and data based on personal research;
- Reviews the budget for the discharge of debts, ensuring that all possible assets and liabilities have been accounted for to effect a complete execution of the bankruptcy petition;
- Follows through with the payment plan. The US Trustee is often in constant connection with the creditor to make sure that payments are being made according to agreement.
All in all, a US Trustee plays a very important role when it comes to bankruptcy proceedings. Note though that the extent of their power depends largely on the type of Bankruptcy Chapter in discussion.