Who is the U.S. Trustee in Bankruptcy?

23 Jul Who is the U.S. Trustee in Bankruptcy?

Bankruptcy court has a special department that oversees how the cases are administered. The Office of the United States Trustee is an arm of the Department of Justice charged with certain duties in bankruptcy cases.

The role of the U.S. Trustee can differ from district to district, but principal responsibilities are to appoint and supervise the bankruptcy case trustees, i.e., the trustees appointed in your Chapter 7 or Chapter 13 case. Those are the trustees who you will interact with the most. The US Trustee also will monitor cases to make sure they move along, they review cases for abuse of the bankruptcy system, and also watch for other problems such as fraud.

In recent years, much of the U.S. Trustee’s activity has been focused on the bankruptcy means test, the artificial budget used to determine whether you qualify for Chapter 7 bankruptcy, or the court believes that you have enough income available to make payments to creditors through a Chapter 13 bankruptcy plan.

They review the information provided, like pay stubs, subtract the appropriate expenses based on IRS guidelines and certain actual expenses, basically doing the math.There is more to it than that, of course.

The UST office asks questions, confirms information, and in my experience is willing to listen to explanations in the unusual case.In most cases the UST can perform its analysis based solely on the information provided in the documents filed initially in your case. In other cases there may be subtle details that are not apparent on the face of those documents and additional information may be required.

It can be a bit unnerving for a debtor to answer all the questions posed by the UST, whether in the form of requests for documents or questions at the Meeting of Creditors.

It takes an enormous amount of information to prepare a bankruptcy filing, and then someone asks for even more information. Chances are, however, that the same questions have occurred to your experienced bankruptcy attorney, and he has already asked you for much of the same information, and can offer explanation and insight into your situation.

Ultimately, if you (and your attorney) cannot agree on whether your case is qualified for Chapter 7, a bankruptcy judge will make that determination, but most cases don’t get that far, and are resolved by the asking and answering those questions.

Sometimes the UST is able to persuade a debtor that a payment plan is feasible, and beneficial; sometimes a debtor may convince the UST that a payment plan is not feasible, or that the case does not constitute an abuse of the bankruptcy system.

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