As I mentioned on Monday, the trustee is involved for a longer period in a Chapter 13 bankruptcy case than in Chapter 7. Trustees earn a percentage of money collected from every bankruptcy case, which is why they want to collect as much money as possible for the creditors. It is also why you will want to be working with a Washington DC or Maryland bankruptcy attorney experienced in working with these trustees.
The Chapter 13 trustee is appointed by the United States Trustee Program and authorized to administer your Chapter 13 repayment plan. Among the trustee’s responsibilities, he or she:
- Reviews your bankruptcy petition and schedules for thoroughness and accuracy
- Reviews your proposed repayment plan to ensure it complies with bankruptcy laws
- Conducts the creditors’ meeting
- Recommends your Chapter 13 plan be confirmed, or objects to confirmation
- Collects payments on your bankruptcy plan and distributes payments to creditors according to the terms of your plan
While the trustee is responsible for making sure you comply with your plan after it has been approved, he or she is not responsible for reminding you of your repayment obligations. Should you fall behind on payments, the trustee will probably be the person asking the bankruptcy court to dismiss your case. Still, it is important to remember that trustees do not provide legal advice. You must stay in contact with your attorney.
If a creditor contacts you, an asset of yours is repossessed or a mortgage company reports that you have fallen behind on payments, you need to contact your attorney. The same holds true if you lose your job, take a pay cut, have a baby or anything at all that changes your financial situation. On Friday, I will discuss some more of the instances that can arise in a Chapter 13 bankruptcy case which make your communication with your lawyer—not the trustee—so critical.
Law Firm of Kevin D. Judd – Maryland bankruptcy lawyer