Because the Eastern District of North Carolina is altering the Chapter 13 confirmation process it seems like a good time to explore the role of the trustee in Chapter 13 bankruptcy proceedings. Since most Chapter 13 bankruptcy cases take approximately three to five years to successfully complete, it is important to understand the roles and duties of the trustee in your case.
Upon filing your petition with the Bankruptcy Court, the trustee will:
1. Review all documents submitted to the court in addition to pay stubs and tax returns sent directly to the trustee’s office. After studying your assets, liabilities, income and monthly expenses listed in your petition for accuracy;
2. The trustee is permitted to be heard on whether or not he believes the court should confirm the plan. The trustee might object to confirmation for a variety of reasons; for example, the trustee believes the plan payments are not feasible for you to pay or, a creditor-filed proof of claim lists a different amount owed than what is scheduled in the petition and planned for in the repayment plan. No matter the objection, the issue must be resolved or adjudicated by the court prior to the Chapter 13 plan being confirmed. Objections to confirmation are not at all uncommon, so do not panic if an objection is filed in your case!
3. Another responsibility of the Standing Chapter 13 trustee is to ask questions of the debtor at the required 341 Meeting of Creditors, which occurs 21 to 50 days after filing your petition. During the meeting, the trustee will examine you, under oath, and ask questions regarding the information listed on your bankruptcy schedules.
4. The debtor’s 1st plan payment to the Chapter 13 Trustee is due starting the 1st day of the next month after the case is filed. You must begin sending monthly payments to the bankruptcy trustee according to your proposed plan, even if the plan has not yet been confirmed. The trustee is responsible for administering the repayment plan and upon confirmation, the trustee will distribute the money from your plan payment to your creditors according to your plan terms.
5. The trustee is also permitted to review proof of claims filed by your creditors and to be heard on valuation and plan modification. A proof of claim is a document, filed by a creditor, that states the amount you owe. In order to participate in plan payment distributions, non-governmental creditors must file proof of claim forms within 70 days of the filing date. Once the deadline for submitting proof of claims has passed, the trustee or the debtor may object to claims filed for various reasons; for example, a lack of supporting documentation, incorrect amount, late filing date, or an incomplete form.
The Chapter 13 trustee is appointed by the bankruptcy court and his duties and responsibilities are outlined in the Bankruptcy Code. You can view the official duties of the Standing Chapter 13 Trustee in 11 U.S.C § 1302 of the United States Bankruptcy Code by clicking here.