The court-appointed Trustee serves a different role in a Chapter 13 filing than a Chapter 7 bankruptcy case. Administration is their primary function, keeping accurate records of your payments and creditors’ compensation, whereas their responsibility is to liquidate the client’s assets to pay back a percentage of what is owed in a Chapter 7 filing. A Trustee presides over your 341 meeting with creditors who review your bankruptcy petition and question you under oath. Chapter 13 cases take three to five years to complete. Your bankruptcy attorney can help negotiate with the Trustee and keep your case progressing smoothly.
Can a Trustee Reject My Repayment Plan?
A Trustee’s primary goal is to make sure creditors are compensated according to bankrutpcy law. They must review all paperwork to determine if your income is correct and your expenses are reasonable. It is not uncommon for them to require additional paperwork from you. If they see a problem with your repayment plan, they can request changes through an objection process. The final decision regarding the approval of your Chapter 13 Plan is ultimately up to the judge assigned to your case.
Does the Trustee Review Creditors’ Claims?
The Trustee reviews all aspects of your Chapter 13 bankruptcy case. To be considered for repayment, a creditor must file a proof of claim within 90 days of your 341 creditors meeting. If their documents are not submitted correctly, a Trustee can object to their claim.
When Do I Start Paying the Repayment Plan?
You must start making monthly payments to the Trustee within 30 days of filing. They can ask you to pay fees in the form of a money order or cashier’s check. Often a Trustee requests that a bank take the money directly from your paycheck, which is called a wage deduction. The Trustees also have electronic payment availability on their websites. The accumulated funds are held in trust until your repayment plan is approved. Many Trustees make this information available on a website. You and your attorney can review how much you have paid and how much creditors are paid.
Who Pays My Creditors?
The Trustee is responsible for paying most creditors treated in your Chapter 13 Plan. There may be some creditors that you pay directly. Your attorney will tailor a plan for your specific case. Payments start to the Trustee before your plan’s approval. After confirmation (approval) of the plan, the Trustee distributes the money to creditors according to a scheme outlined in the United States Bankruptcy Code.
What Happens if I am Late or Miss a Payment to the Trustee?
Late or missed payments are grounds for the Trustee to ask the Court to dismiss your bankruptcy case through a procedure called a Motion to Dismiss. In many cases, we can work out a catch up plan with the Trustee. However, it makes cases more difficult to complete and generally raises your monthly payments. If your Trustee does not set up automatic withdrawals from your paycheck, do it yourself. Discuss your options with your attorney.
Sawin & Shea – Indianapolis Bankruptcy Attorneys
It can take years to complete your Chapter 13 bankruptcy repayment plan. Turn to the Indiana bankruptcy attorneys at Sawin & Shea to assist you in dealing with your Trustee and any issue that may arise. We are experienced in bankruptcy procedures. Please do not hesitate to call us today at 317-759-1483 or send an email for a free consultation. We are ready to help.