What Does the Trustee Do in a Chapter 13 Bankruptcy?
When you file for Chapter 13 bankruptcy in Maryland, the courts will assign a trustee to your case. The trustee is responsible for handling the court’s end of your case.
What Does a Trustee Do in Chapter 13 Bankruptcy?
The trustee in your case fills a very important role. He or she is responsible for examining the Chapter 13 repayment plan you propose, as well as receiving the payments you make. Your trustee will also:
- Monitor monthly income and expense reports
- Keep track of your duty to file tax returns (for four years prior to your date of filing for Chapter 13 bankruptcy and each year during your plan)
- Provide the payee and the child support enforcement agency with some information if you owe child support
Shortly after you file for this type of debt relief, your trustee will participate your confirmation hearing. The confirmation hearing lets your creditors have a chance to review the repayment plan you created, and if any of your creditors—or the trustee—feel that it’s unfair or needs to be modified, they can speak up at the hearing.
Why Would a Trustee Object to Your Repayment Plan?
The trustee is tasked with making sure your repayment plan meets the requirements outlined in U.S. Bankruptcy law. In order to do that, your trustee has to review your income and expenses and determine whether you can actually repay your creditors. If the trustee feels that you could pay your creditors more, he or she may object; if the trustee believes that you’re committing to too much (you’re promising to pay money that you may not have), he or she may also object.
What Happens When You Make a Payment?
When you make a monthly payment toward your debt as part of a wage earner’s plan, the trustee sends each creditor its portion of the payment.
What Else Does Your Trustee Do?
Your trustee can actively help modify your plan if it’s necessary (such as when you’re not paying enough to your creditors or when you overestimate your future ability to pay). He or she can help you create a budget that helps you live with your repayment plan, as well as participate in hearings that determine the value of property involved in your case.
Do You Need to Talk to a Maryland Bankruptcy Attorney About Filing Chapter 13?
If you’re thinking about filing Chapter 13 bankruptcy in Maryland, we can answer your questions and give you case-specific legal advice.
Call us at 301-933-2595 for a free bankruptcy consultation. Tell us what you’re going through and we’ll start developing a strategy that gets you the best possible outcome.