{"id":605,"date":"2013-06-11T15:09:28","date_gmt":"2013-06-11T15:09:28","guid":{"rendered":"http:\/\/www.newnanbankruptcy.com\/?p=605"},"modified":"2017-05-10T12:44:13","modified_gmt":"2017-05-10T12:44:13","slug":"what-is-the-trustee","status":"publish","type":"post","link":"https:\/\/www.newnanbankruptcy.com\/what-is-the-trustee\/","title":{"rendered":"WHAT IS THE \u201cTRUSTEE\u201d?"},"content":{"rendered":"
\n
\n
\n

In the broadest sense, the bankruptcy \u201cTrustee\u201d refers to the Office of the United States Trustee, which is part of the United States Department of Justice. The Trustee comes from the executive branch of the government, which is different from the bankruptcy judge, who is part of the judicial branch of government.<\/span><\/p>\n

The mission of the Trustee is to promote integrity and efficiency in bankruptcy cases for the benefit of both debtors and creditors. The Trustee\u2019s office oversees the administration of cases, and is a \u201cwatchdog\u201d to prevent fraud and abuse.<\/span><\/p>\n

As a practical matter, the \u201cTrustee\u201d in a particular case is a lawyer who \u201cadministers\u201d the bankruptcy estate. In a Chapter 13 reorganization, the Trustee conducts the first court hearing (the \u201cMeeting of Creditors\u201d), and makes recommendations to the bankruptcy judge with regard to the approval (\u201cconfirmation\u201d) or rejection (\u201cdismissal\u201d) of Chapter 13 plans. After the plan is accepted, the Trustee monitors the debtor\u2019s performance under the approved plan.<\/span><\/p>\n

The Chapter 13 Trustee also takes in \u201cplan payments\u201d from debtors each month, and then pays those monies out to creditors. In the Northern District of Georgia, the Chapter 13 Trustee has an office in Atlanta with several lawyers and support staff. The Chapter 13 Trustee takes in millions and millions of dollars from debtors, and then disburses those monies to creditors each month.<\/span><\/p>\n

In Chapter 7, the \u201cTrustee\u201d plays a different role. In Chapter 7, a local \u201ccase Trustee\u201d is assigned to conduct the first court hearing (\u201cMeeting of Creditors\u201d) and to \u201cadminister\u201d the estate. A Chapter 7 case is a \u201cliquidation\u201d case. The general purpose of the Trustee is to liquidate (sell) \u201cassets of the estate\u201d. These consist of the debtor\u2019s property as of the date of filing to the extent that the property is worth more than what the debtor is allowed to \u201cexempt\u201d (keep for himself). The Chapter 7 estate does not include the debtor\u2019s wages after the case is filed, though it may include assets inherited within six months of filing, or the recovery of monies from law suits.<\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n

As a practical matter, the vast majority of Chapter 7 cases are \u201cno asset\u201d cases. This means that there are no assets for the Trustee to sell, and usually the debts that are owed to a debtor\u2019s creditors are \u201cdischarged\u201d without any payment whatsoever. The reason is that \u201cexemptions\u201d permitted to debtors are fairly generous, so that people who don\u2019t own very much property free of liens are usually permitted to keep that property. (If property has a lien on it, it belongs to the creditor to the extent of the lien, and the Trustee has no interest apart from the \u201cequity\u201d in it.)<\/span><\/p>\n

As explained elsewhere, \u201cexemptions\u201d are allowances permitted under the law in different dollar amounts in different categories of property. One of the jobs of the debtor\u2019s lawyer is to evaluate the property that you own and determine what you can protect (\u201cexempt\u201d). If you are at risk of losing something that you don\u2019t want to lose, sometimes Chapter 13 is the superior choice, or sometimes you may have non-bankruptcy options. The key to making safe decisions is to clearly disclose what property you own to your lawyer in the early stages of consultation.<\/span><\/p>\n

\n
\n
\n

Please <\/span>call Newnan Bankruptcy<\/a> at 770-683-3303 <\/span>to discuss your particular situation with our lawyers.\u00a0<\/span><\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n