In September of last year I wrote a blog describing what a trustee is and what their responsibilities entail. While thinking about it today, I decided it might be helpful to clarify once again the difference between a bankruptcy trustee and a United States Trustee. First, let’s note that a trustee is assigned in Chapter 7, 12, and 13 bankruptcy cases, and in some Chapter 11 cases. In a Chapter 7 bankruptcy case, the trustee is referred to as a “panel” trustee. This is because a group of approximately two dozen trustees are assigned by rotation. In Chapter 12 and Chapter 13 bankruptcy cases the trustee is referred to as a “standing” trustee. This is because your Chapter 12 trustee will almost always be the same person, and your Chapter 13 trustee will always be the same person.
The job of the trustee is to administer the bankruptcy case, or the bankruptcy estate, to make sure creditors are treated as intended by the Bankruptcy Code, and to preside over the meeting of creditors. The trustee either collects and sells non-exempt property, as in the case of a Chapter 7 bankruptcy, or collects and pays out money from a repayment plan, as in the case of a Chapter 12 or Chapter 13 bankruptcy. The trustee may require that you provide-before, during or after the meeting of creditors-under penalty of perjury, information and documents. If you fail to cooperate with the trustee it could be grounds to have your discharge denied.
Keep in mind that although trustees are almost always attorneys, they are not your attorney. They do not represent you. They work on behalf of the bankruptcy estate and all of its creditors. Their fees come out of the bankruptcy filing fees or out of the money collected in a bankruptcy case. They are appointed by the United States Trustee.
The United States Trustee’s Office is part of the U.S. Department of Justice. The office is separate from the bankruptcy court. The United States Trustee’s Office is what is known as a “watchdog” agency. They are responsible for monitoring bankruptcy cases, appointing and supervising all trustees, and identifying fraud in bankruptcy cases. The United States Trustee’s Office cannot give you legal advice, but they can give you information about the status of a case. If you are having problems with a trustee, or have evidence of fraud in a case, you can contact them. The United States Trustee’s Office does not administer specific cases. They review all bankruptcy petitions and pleadings filed in bankruptcy cases, and participate in many proceedings. The trustees whom they appoint administer the cases. However, they can file motions in the bankruptcy case, such as a motion to dismiss the case or convert it to another Chapter.
If you have any questions and live in Denver, Aurora, Arvada, Boulder, Brighton, Broomfield, Commerce City, Englewood, Golden, Highlands Ranch, Lakewood, Lafayette, Littleton, Northglenn, Westminster, Wheat Ridge, Colorado please feel free to contact me. Kevin D. Heupel, Colorado Bankruptcy lawyer, 303-955-7570, COBankruptcyHelpEmail, free-consultation form.
