When a Chapter 13 bankruptcy is filed, the debts are generally reorganized and repaid within five years. The creditors receive the dues over a three to a five-year term and the administration of this plan is monitored by an appointed trustee, exclusively for Chapter 13 filings. Here is a brief list of the bankruptcy trustee’s duties with regards to Chapter 13 bankruptcy filing –
- Reviewing all associated paperwork of the filing
- Reviewing of the repayment plan for its compliance to bankruptcy laws
- Collecting the payments as per the plan and distributing the same to the creditors
- Executing the full terms of the Chapter 13 plan
A detailed enumeration of the bankruptcy trustee’s activities is as follows:
- Reviewing the repayment plan–The bankruptcy trustee reviews the Chapter 13 repayment plan for its benefits to both the creditors and the debtor. The plan outlines the schedule for repayment of some or all of the debts of the debtor. For the efficient reviewing of this plan, the trustee starts from the inception of the filing case – with reviewing of all of the official bankruptcy forms and cross-checking of the financial figures on the forms against the figures on the supporting documents. As a debtor, it has to be remembered that producing of tax returns, past paycheck stubs, and bank statements will be mandated in the petition in order to substantiate the income, monthly expenses and debts.
- Conducting the creditors meeting–Mostly after a month of the filing, the 341 hearing or the meeting of creditors will be organized by the bankruptcy trustee. In this meeting, the debtor needs to answer all questions about the bankruptcy filing, the paperwork is done and the repayment plan. This hearing is conducted under oath and the debtors need to answer the trustee’s questions about the income, debts, and If there is a need to produce more of the supporting documents, the trustee organizes one more meeting at a later date else, this meeting is generally concluded by the bankruptcy trustee.
- Overseeing of confirmation hearings – In circumstances where there is a rejection of the formalized plan by the court or if there are potential issues foreseen with the execution of the plan, the debtor will be given a period to correct those issues and also submit a draft opposition in support of his plan. The appointed bankruptcy trustee will oversee these confirmation hearings and assess on the feasibility of the plan to the judge. At the conclusion of this hearing, the judge decides whether to further approve or reject the plan
- Administering the repayment plan and handling of collections–The repayment of funds will begin exactly after 30 days from the filing of Chapter 13 bankruptcy and these are paid monthly to the bankruptcy trustee. If the repayment plan is yet to be approved by the court, the bankruptcy trustee holds all the funds from the debtor. Once approved, the funds are distributed to the creditors according to the plan’s terms. During the entire repayment tenure (which is usually three to five years in Chapter 13 bankruptcy), the trustee continues to collect the funds from the debtor and uses the same to pay the creditors. The record of receiving of funds and paying off is diligently maintained by the trustee
- Preventing improper claims–This is a task that involves creditors and has to be completed within 70 days of the Chapter 13 bankruptcy filing. All creditors must file a proof of claim to the court that states the amount owed to them and also support it with relevant documentation. The Bankruptcy trustee reviews this and highlights any improper claims or any that lack relevant documentation
Advantages in Chapter 13 bankruptcy filing
There are some key benefits associated with Chapter 13 bankruptcy filing and it is rightly referred to as the wage earner’s plan.
- Gives the flexibility to repay part of the debts or even all of the debts over a repayment tenure
- Enables the debtor to interact with a trustee for repayment instead of direct contact with the creditors
- Permits the rescheduling of the debts and span them comfortably over the tenure of the plan
- Empowers to save prime assets such as home from being foreclosed
- Protects all co-signers or third parties who are liable with the debtor towards the open debts
If you are looking for guidance with Chapter 13 bankruptcy filing, especially in Los Angeles or Dallas, TX areas, then Recovery Law Group can be approached. Their adept team of attorneys is available to render their services.