Chicago Bankruptcy Question: Who is the Chapter 7 Trustee?

Chicago Bankruptcy Question of the Day: Who is the Chapter 7 Trustee?  The Chapter 7 Trustee is a disinterested party who is appointed by the U.S. Trustee's office to review the bankruptcy filing and interview the debtor in bankruptcy in order to determine if there are any assets available to be liquidated, ensure that the petition filed is complete and accurate and to ensure there are no questionable issues that may prevent the debtor in bankruptcy from receiving their discharge.

In the Chicago area, the Trustee is randomly assigned by the clerk of the court upon case filing from a list of standing Trustees.  The list can be found on the U.S. Department of Justice website under the U.S. Trustee Program.  Generally speaking, the Trustees are attorneys whose practice includes bankruptcy, but not a significant amount of consumer debtor representation. 

The Trustee has a variety of responsibilities in a Chapter 7 case.  They review the petition and schedules filed with the court to ensure that the debtor(s) qualify for a Chapter 7 bankruptcy, receive and review pay advices and tax returns to ensure that the petition and schedules are accurate and interview the debtor(s) at the scheduled Section 341 Meeting of Creditors to ensure that not only are all of the documents accurate, but also to ensure the the debtor(s) was properly advised and represented throughout the Chapter 7 process.

If the debtor(s) has any non-exempt assets, it is the Trustee who liquidates (sells) these assets and distributes the proceeds to the creditors.  The Trustee has the responsibility and authority to investigate the financial affairs of the debtor(s), void any fraudulent transfers or conveyances of assets, attempt to recover any receivables of the debtor(s) and, if they deem it appropriate, object to the discharge of the debtor(s).  

With that said, the bankruptcy Trustees are not the enemy of the debtor(s).  The Trustee is assigned with the responsibility of looking out for the creditors and maintaining the integrity of the bankruptcy system.  The job involves a significant amount of time and paperwork, for which they receive a relatively small portion of the debtor(s) filing fee.

A debtor(s) who has been properly represented throughout their Chapter 7 bankruptcy will have no surprises or unexpected issues with their assigned Trustee.  This is why it is imperative that you have a Chicago bankruptcy attorney who is both well-versed and experienced with the federal bankruptcy code and is familiar with the local rules, practices and Trustees.  At Ledford & Wu, all we do is bankruptcy and consumer representation in the Chicago area and we know all of the ins and outs of the process.  Feel free to call us today for a free consultation.

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