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Chicago Bankruptcy Question: Who is the Chapter 13 bankruptcy trustee?

Chicago Bankruptcy Question of the Day: Who is the Chapter 13 bankruptcy trustee?  In every Chapter 13 bankruptcy in the Chicago area, a Chapter 13 trustee is assigned to the case as soon as it is filed.  The trustee has a variety of roles to play throughout the Chapter 13 process and is an integral part of every Chapter 13 bankruptcy.

The first role that the trustee plays in a Chapter 13 case is that they are responsible for collecting the scheduled payments from the debtor.  In most cases, these are fixed monthly payments made over a set period of time.  This can also include lump sum payments, such as tax refunds and annual bonuses, and one-time windfall payments, such as proceeds from a lawsuit or lottery winnings.  The expenses of the trustee's office is paid by taking a small portion of every payment made to their office.  The Chapter 13 trustee is also responsible for the disbursement of the funds to creditors in accordance with the plan of reorganization.  It is the trustee who issues checks to each creditor in the order and manner provided for in the plan and is responsible for accounting for each of those payments.  The trustee has the power to request dismissal of a Chapter 13 case is payments are not being received by their office and must maintain an accounting of all funds received and disbursed.

The trustee in Chapter 13 bankruptcy in the Chicago area is also responsible for conducting the Section 341 Meeting of Creditors.  It is the trustee, or one of their representatives, who questions the debtor regarding the accuracy and completeness of the debtor's schedule, the reasonability of their proposed budget and the feasibility of the plan.  The trustee has the ability to raise objections to confirmation of a debtor's plan and can require documentation to ensure that the debtor's schedules are indeed complete and accurate. 

The Chapter 13 trustee has the power to object to claims filed in a Chapter 13 bankruptcy, object to confirmation of a plan if they believe that the plan was not proposed in good faith and assist the debtor in the performance of the plan (so long as they do not provide legal advice).  The Chapter 13 trustee has the responsibility to provide notice to domestic support recipients of the bankruptcy filing and to file a final report and accounting with the U.S. Trustee's office when a case is completed.

In the Chicago area there are three Chapter 13 bankruptcy trustees.  In Cook County, there is Tom Vaughn and Marilyn Marshall.  For the collar counties, including Will, DuPage, Kane, Lake and Grundy counties, the trustee is Glenn Stearns.  All three of the Chicago area trustees are true professionals and solid people, but they are also aggressive when it comes to objecting to and requesting dismissal of cases with issues.

While the Chapter 13 trustee is not the opponent of a debtor in bankruptcy, they are not their allies either.  The trustee's duties are predominantly to the court and to the creditors to ensure that everything is done properly and that the creditors receive the maximum distribution that they can under a Chapter 13 plan.  To effectively work with the trustee, you need to have a bankruptcy attorney on your side that has the knowledge and experience to stand up for your rights.  At Ledford & Wu, our bankruptcy lawyers have years of experience working with and arguing against the Chicago area Chapter 13 trustees.  We'll fight for your best interests; call us today.

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