If you’re filing for Chapter 13 bankruptcy, you will encounter the Chapter 13 Trustee. This individual plays a key role in your bankruptcy case. Understanding their responsibilities can help you navigate the bankruptcy process smoothly.
Who Is the Chapter 13 Trustee?
The Chapter 13 Trustee is an official appointed by the U.S. Bankruptcy Court. Their primary job is to oversee your Chapter 13 case and manage the distribution of payments to creditors. Unlike Chapter 7, where assets are liquidated, Chapter 13 allows you to keep your property while repaying debts over time. The Trustee makes sure your payments are in line with the Chapter 13 plan you create with your Livonia bankruptcy attorney.
Role of the Chapter 13 Trustee
The Trustee handles several important tasks in your case:
- Reviewing Your Payment Plan: After filing, the Chapter 13 Trustee will review the payment plan you submit. The Trustee will ensure it aligns with bankruptcy laws and the U.S. Bankruptcy Code.
- Collecting Payments: You will make monthly payments to the Chapter 13 Trustee. They will then distribute the funds to your creditors in a priority order.
- Monitoring Compliance: The Chapter 13 Trustee ensures that you stick to your Chapter 13 payment plan. If your financial situation changes, you may need to modify the plan with your Livonia bankruptcy attorney’s help.
How Does the Trustee Distribute Payments?
Once you submit your monthly payments, the Chapter 13 Trustee handles the distribution. The Trustee follows the payment priority outlined in your Chapter 13 payment plan. The typical order of payments is as follows:
- Administrative Costs: The Trustee’s fees and your attorney’s fees are paid first.
- Secured Creditors: This includes your mortgage or car loans. Payments on these debts are prioritized.
- Priority Unsecured Debts: These are debts like child support or certain taxes.
- Non-Priority Unsecured Debts: This group includes credit card debt and medical bills, which are paid last.
What Happens After Filing the Chapter 13 Payment Plan?
Once you file the payment plan, the Trustee will review it. If everything is in order, the Trustee will submit the plan to the bankruptcy court for approval. However, creditors or the Trustee may object to parts of the plan. Your Livonia bankruptcy attorney will assist in addressing these objections.
Within the Detroit Bankruptcy Court, the Chapter 13 Trustees nearly always object to the confirmation of every Chapter 13 bankruptcy plan filed. They are highly aggressive. It is unlikely that you will succeed in a Chapter 13 bankruptcy proceeding without a skilled and experienced bankruptcy attorney assisting you in Detroit.
Note that the Detroit Bankruptcy Court oversees cases filed by residents of Wayne, Oakland, Macomb, Washtenaw, Monroe, and other counties. Not just residents of Detroit.
The Importance of the Chapter 13 Trustee
The Chapter 13 Trustee ensures that your bankruptcy case runs smoothly. They protect the interests of your creditors and make sure the plan is feasible for you. Their role helps guarantee that you fulfill your repayment obligations under the court-approved plan.
How Can a Livonia Bankruptcy Attorney Help?
A skilled Livonia bankruptcy attorney will guide you through the Chapter 13 bankruptcy process. They will help you draft a payment plan that meets your financial needs while complying with bankruptcy laws. Your attorney will work to ensure the plan is confirmed and effective.
If you’re in Livonia or the Metro Detroit area and are considering Chapter 13 bankruptcy, contact us for a free consultation. Our attorney John Hilla has successfully assisted Livonia and Metro Detroit Chapter 7 and Chapter 13 bankruptcy clients for nearly 20 years. We will help you navigate the process and defend your interests against both your creditors and the Chapter 13 Trustee.
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