Chapter 13 is a type of bankruptcy relief that affords individuals protection from creditors as long as they pay off a portion of their outstanding debts over time according to a court-approved plan. The plan is supervised by a trustee, who acts as the court’s overseer throughout the process. The trustee plays a pivotal role in bringing out a fair and balanced outcome of the Chapter 13 case both for the debtor getting a financial fresh start and for creditors getting partial repayment of their debts.
If you’re filing a Chapter 13, a working understanding of the trustee’s functions is integral to achieving a successful completion. Here are the key duties and responsibilities of the trustee:
- Evaluation of financial affairs — Unlike a Chapter 7 trustee, who collects and sells the debtor’s assets, the Chapter 13 trustee acts as an examiner of the debtor’s financial situation. They analyze the debtor’s income, expenses and debts. This evaluation involves scrutinizing documents such as pay stubs, bank statements, and tax returns to verify the accuracy of the information provided. The trustee also assesses the feasibility of the proposed repayment plan, considering the debtor’s income and essential expenses against the plan’s monthly payments.
- Recommendations to the court — Based on the evaluation, the trustee give the court recommendations regarding the proposed plan’s feasibility and fairness. The trustee assesses whether the proposed repayment schedule realistically allows the debtor to fulfill their obligations within the three- to five-year timeframe. Additionally, the trustee ascertains whether the plan offers creditors a fair share of their debts, considering the debtor’s financial circumstances. The goal is to balance allowing the debtor a fresh financial start with maximizing the return for creditors.
- Supervision of repayment plan — Once the court confirms the plan, the trustee transitions into a supervisory role. They become responsible for overseeing the debtor’s adherence to the plan throughout the repayment period. This involves monitoring the timely receipt of scheduled payments, ensuring accurate allocation of funds, and potentially taking action if the debtor falls behind. The trustee ensures all disposable income, after necessary expenses, is directed toward debt repayment according to the confirmed plan.
- Case management — The trustee also acts as a case manager to ensure the debtor’s compliance with all procedures and laws. This can involve answering questions, clarifying processes and addressing any concerns that arise during the repayment period. In some instances, the trustee may recommend modifications to the plan based on unforeseen changes in the debtor’s financial situation. They can also facilitate the meeting of creditors, which provides a platform for creditors to ask questions about the plan and voice any concerns. In this capacity, they also communicate as needed with the debtor’s Chapter 13 attorney.
Jeff Field & Associates helps consumers throughout Georgia discharge eligible debt through Chapter 13 bankruptcy. We have offices in Scottdale, Gainesville, Marietta, Lawrenceville, Douglasville and Athens. To schedule a personal consultation, call 404-381-1278 or contact us online.