Bankruptcy Alphabet-U is for U.S. Trustee

While we have walked through the Bankruptcy Alphabet we have made mention of the bankruptcy trustee, but have never really explained the role of the trustee in a debtor’s bankruptcy case.
Bankruptcy Alphabet-U is for US Trustee

        U is for U.S. Trustee

Photo by Leo Reynolds

The U.S. Trustee is a part of the United States Department of Justice and Trustee administration is governed by the U.S. Attorney General. The role of the U.S. Trustee is to administer the bankruptcy cases filed, oversee the administrative functions of private bankruptcy case trustees, ensure compliance with bankruptcy law and procedure and helps investigate bankruptcy fraud and abuse with other law enforcement agencies.

The U.S. Trustee appoints and supervises private trustees who directly administer Chapter 7, 12 and 13 bankruptcy cases or administer cases when the private trustee is unable. In Chapter 11 cases, the U.S. Trustee appoints and convenes a creditors’ committee and administers the Meeting of Creditors.

The appointed private trustees have different duties depending on the type of case the bankruptcy is filed under.

Chapter 7-
          The Chapter 7 trustees administer the liquidation of the debtor’s bankruptcy estate by conducting a meeting of creditors, reviewing the petition, claiming property of the estate, voiding transfers, and disbursing claimed funds to unsecured creditors.

Chapter 12-
          The Chapter 12 trustees administer the debtor’s family farm reorganization by conducting a meeting of creditors, reviewing the petition, review the debtor’s proposed plan for compliance with the bankruptcy code, and disburse funds received from Debtor to the creditors.

Chapter 13-
          The Chapter 13 trustees administer consumer debtor’s reorganization by conducting a meeting of creditors, reviewing the petition, review the debtor’s proposed plan for compliance with the bankruptcy code and disburse funds received from Debtor to the creditors.

Abuse Prevention
          The U.S. Trustee also reviews individual bankruptcy cases to determine whether they are abusive. This usually occurs in a Chapter 7 liquidation case where the Debtor has either failed the means test or the U.S. Trustee believes bad faith is involved and that the Debtor’s continuing in a Chapter 7 case would be abusive because Debtor has regular income to fund a Chapter 13 case.

The role of the U.S. Trustee is critical to the proper administration of the bankruptcy code.

Other Bankruptcy Lawyers talking about the Letter U include:

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