Who Does What in Bankruptcy?

It’s a lot easier to make sense of bankruptcy if you know who’s who in the process.

Debtor:

The person or business filing bankruptcy. A debtor and spouse can file a joint petition in bankruptcy. The debtor has various duties which your attorney will help you with. The debtor’s most important duty is simply to be honest and cooperative throughout the process.

Creditor:

The person or business which has a claim against a debtor. That claim is often simply for an amount of money owed on a debt. But a claim can also be an obligation on a contract or for an injury that is not of a specific amount. Creditors can be involved in the bankruptcy process in lots of ways, but often chose not to be. They tend to be more involved if they have collateral securing their claim, or have some personal reason to be particularly interested (such as sometimes ex-spouses and ex-business partners).

Bankruptcy Clerk:

Theoffice which handles the clerical aspects of the bankruptcy court.It electronically accept your case for filing, maintains your bankruptcy file, and handles the logistics and some of the paperwork in your bankruptcy case. Much of this paperwork now occurs electronically—including the filing of your petition and other documents. You will not likely have anything directly to do with the clerk’s office (other than get notices from it) if you have a lawyer representing you.

Bankruptcy Judge:

The person who is ultimately in charge of your case. Bankruptcy judges are appointed to terms of 14 years. They are “judicial officers of the United States district court,” not full federal judges. In most straightforward Chapter 7 and 13 cases, you will not have any occasion to meet the bankruptcy judge assigned to your case. But if there is any significant dispute with a creditor or anyone else, the judge will likely be the person resolving that dispute.

U.S. Trustee:

The enforcer in the bankruptcy system. You will seldom hear from the U.S. Trustee, but if you do it’s not usually good news. As described on its website:

The United States Trustee Program is a component of the Department of Justice that seeks to promote the efficiency and protect the integrity of the Federal bankruptcy system. To further the public interest in the just, speedy and economical resolution of cases filed under the Bankruptcy Code, the Program monitors the conduct of bankruptcy parties and private estate trustees, oversees related administrative functions, and acts to ensure compliance with applicable laws and procedures. It also identifies and helps investigate bankruptcy fraud and abuse in coordination with United States Attorneys, the Federal Bureau of Investigation, and other law enforcement agencies.

Chapter 7 Trustee:

The person in charge of determining if you have assets which are not exempt (protected), and presides at the so-called “meeting of creditors.” Your trustee is assigned to your case by the U.S. Trustee from a panel of local Chapter 7 trustee, and your attorney cannot influence who becomes your trustee. In the somewhat uncommon event that there are non-exempt assets, your Chapter 7 trustee takes possession of them, sell (“liquidates”) them, and distributes the proceeds to the creditors.

Chapter 13 Trustee:

The person assigned to oversee your Chapter 13 case. He or she reviews your Chapter 13 plan and other documents, presides at your “meeting of creditors,” raises objections to your plan before the bankruptcy court if appropriate. Then once the Plan is approved, the trustee receives your Plan payments and distributes them to the creditors as specified in the Plan. The Chapter 13 trustee also files motions at court if you are not complying with the Plan, and tells the court when you have successfully completed your Plan obligations.

If you are in the Dallas-Fort WorthMetroplex, I can help you understand how bankruptcy works. I’m Carrie Weir, an experienced Texas bankruptcy lawyer. I work with individuals, couples, and small businesses mostly in and near the towns of Rockwall, Heath, Greenville, Lavon, Wylie, Mesquite, Royse City, Sachse, and Rowlett. Please call me for a free and confidential consultation at 972-772-3083, or use the contact form here.