This week, I have discussed the roles of a Chapter 7 trustee and a Chapter 13 trustee, but today I will focus on the role of a United States Trustee. The U.S. Trustee Program is a component of the Department of Justice and has two primary roles in both Chapter 7 and Chapter 13 cases. A U.S. Trustee is responsible for investigating bankruptcy fraud or other misconduct on the part of either debtors or creditors, and also determine whether a Chapter 7 discharge constitutes an abuse of the bankruptcy process. The U.S. Trustee program consists of 21 regional offices nationwide and an executive office in Washington DC.
While a U.S. Trustee has the power to subpoena financial records or other documents to uncover bankruptcy fraud, most clients who are honest in their court dealings will not have to deal with a U.S. Trustee. Essentially, the U.S. Trustee evaluates a filer’s bankruptcy means test in a Chapter 7 case to determine whether a debtor might be able to repay a portion of his or her debt through Chapter 13 instead. Because a majority of objections from U.S. Trustees are in cases where Chapter 7 are determined to be an “abuse” of the system, this once again reinforces the importance of having a knowledgeable bankruptcy lawyer assisting you throughout your filing process.
As I mentioned earlier this week, a trustee is often an attorney, but he or she is not your attorney and does not offer legal advice. Whether it is Chapter 7 or Chapter 13, a trustee is representing the best interests of your creditors. It only makes sense to have a lawyer looking out for your best interests as well.