Entries by PDX Law Group

The U. S. Trustee — the Behind-the-Scenes Bankruptcy Administrator and Hope-You-Never-Meet Enforcer

In most consumer bankruptcy cases you hardly hear about the United States Trustee (UST). But when you do, he or she can make a lot of noise. And carries a big stick. All the more reason to understand this most easily misunderstood player on the bankruptcy stage.

As my title suggests, the UST has two primary roles—case administrator and bankruptcy law enforcer. These are reflected in this agency’s stated mission: “to promote integrity and efficiency in the nation’s bankruptcy system by enforcing bankruptcy laws, providing oversight of private trustees, and maintaining operational excellence.”

As a bankruptcy case administrator, the Office of the UST appoints and supervises the Chapter 7 and Chapter 13 trustees. It monitors cases so that they are “administered promptly and efficiently.” It reviews and can raise objections to fees charged by attorneys and other professionals in the bankruptcy process.

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The Chapter 13 Trustee — A Trustee of Many Hats

Your Chapter 13 trustee plays a huge role in the success or failure of your Chapter 13 case. Except he or she actually has at least a half-dozen different roles. Some of which are contradictory. Let me explain.

1) The trustee serves as the gatekeeper of your case, forcing us to play by the rules before allowing your Chapter 13 Plan to be approved by the bankruptcy judge.

2) As part of that role, the trustee’s job is to make you pay as much as possible to your creditors. Because each individual creditor often doesn’t have all that much to lose or gain compared to the cost of each of them hiring an attorney, the trustee is the creditors’ advocate in your case.

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A Happy Chapter 7 Trustee Means a Happy Chapter 7 Case

My goal with our Chapter 7 clients is to provide a smooth path through bankruptcy to a fresh and clean start. The way to get there is to do what it takes to keep your Chapter 7 trustee happy. We keep the trustee happy by making it easy for him or her to do his or her job.

Think about the trustee being the green-yellow-red lights at two intersections in a row. The first intersection is about assets. The second one is about getting a “discharge,” a legal write-off of your debts. In most cases you’re going to get through both intersections—the trustee will claim none of your assets for distribution to your creditors and the trustee will raise no objections to your discharge. But you want to make sure you get through those intersections, and do so without any worry or delay. That’s our goal—two easy green lights.

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