The Trustee’s Role In Your Bankruptcy Case. I Keep ‘Em Happy!

Unless something is amiss or it is an unusually complex case, the only person we will have any contact and dealings with in a bankruptcy filing is the Bankruptcy Trustee.

The United States Bankruptcy Trustee Program is actually a unit of the federal government’s U.S. Department of Justice, often referred to as the “DOJ”. The particular trustee assigned to administer your case is formally denoted as the Interim Trustee, but as stated above, unless something unusual occurs there is no need for a higher-up DOJ Trustee to be involved. The Interim Trustees in South Florida are lawyers and accountants and are distinguished by having completed an extensive training course. They are not judges, but they do have great powers to file motions and make other requests that must be complied with.

Ultimately, your Trustee signs off on your case and recommends to the assigned Bankruptcy Judge, which you will never see, to grant your Discharge and the case is closed. So you see what I mean by keep ‘em happy!

This is where my role as your Ft. Lauderdale bankruptcy attorney is important, in seeing the Trustee’s life is made easy in administering your case, by having matters like your petition and schedules set up in correct fashion. Also, in making sure the Trustee has all the required documentation to review in timely fashion before we meet with him or her.

There are only a handful of Trustee’s and they come to know which practitioners will have matters in order and required documents to them early, and which practitioners will invariably file incomplete schedules, be late in providing documents, etc. As a seasoned Broward County and South Florida bankruptcy attorney, I pride myself on being in the former, or first, group. And for good reason: It does just make life easier for everyone concerned, plus it allows my client’s experience in the process to be as painless as can be.

When I use the term “administer” your case, I am speaking of those matters the Trustee undertakes to manage, supervise and allow you to proceed to Discharge. First, the Trustee reviews your complete bankruptcy petition and schedules, which are filed at the inception of the case. Then the Trustee sends me his or her particular “Required Documentation” checklist, which notes these materials must be furnished to the Trustee at least 10 days prior to the meeting with the Trustee. Each Trustee is a little different, but they all must see last 3 years tax returns. Also from 3 to 6 months bank statements for any and all bank or deposit accounts my clients have an interest in, including the account balances on the date of filing. Additionally, 60 days paystubs must be provided, but these paystubs are actually filed simultaneously with the case.

About 4 - 5 weeks from the date of filing, we will meet at my office, discuss what will transpire at the meeting, and travel together to the Federal Building, where we will have a brief chat with the Trustee. This is variously referred to as the Meeting of Creditors or the 341 Meeting. I am sitting right beside you the whole time, unlike a paralegal bankruptcy preparer who cannot render legal advice or represent you at the 341 Meeting as an attorney can. With a paralegal, you’re on your own. And if (when?) something goes wrong and you inquire, you’ll get the “Hey, I’m not a lawyer” answer.

Creditors rarely appear at the 341 Meeting; they do not have to and lose no rights by not showing. Indeed, the Notice of Commencement (formal term for the notice of the bankruptcy filing that every creditor receives by mail) states: “Debtor’s schedules show no non-exempt assets, do not file claims at this time”. If there are to be non-exempt assets that the Trustee will administer, or divvy up amongst the eligible creditors, they will be notified in due course to then file their Proof of Claim.

Indeed, the Trustee’s really only function in administering your case is to 1.) review your petition and schedules, 2.) chat with your at the 341 meeting, 3.) follow up on any matters they need to, and ultimately, 4.) file a “Report of No Distribution”. This last document filed by your Trustee sets forth a summary of your case, that the Trustee has reviewed the petition and schedules, has examined you at the 341 Meeting, and that all is in order to accord you your Bankruptcy Discharge.

While beyond the scope of this article, the Trustee can investigate matters that come to his or her attention to see if, for example, there may be undisclosed or undervalued assets that should be administered as non-exempt assets of your bankruptcy estate. Often though, by example, if a car is just a few hundred dollars over-exempt, the Trustee has the discretion to not bother with it, as it is labor intensive to decide this case will not be a no-asset case and will have non-exempt assets. If the Trustee exercises this discretion to say “never mind”, the Trustee will announce he or she “abandons” their interest in the asset, which means it is yours to keep and the Trustee will make no claim to it.

I should also mention that engaging my firm as your Ft. Lauderdale bankruptcy lawyer, we rarely have surprises. If there is going to be an issue with an exemption or other matter, I see it coming and I always communicate with the Trustee prior to the 341 Meeting and work things out, so that we might just announce the resolution on the record at the 341 Meeting.

I like to believe that after my many years of practicing as a Broward bankruptcy attorney before all of the South Florida Trustees, that I have credibility and a good reputation before each one. In a very large sense, that is what you are paying for when you hire me.

I take care of my clients as the attestations on my website and Avvo site will show. If you are mired in debt and just had enough, give me a call. I can help!

Steve Glerum, Ft. Lauderdale bankruptcy attorney.