Bankruptcy Trustee Career Guide and Counseling

Question: What happens if my bankruptcy trustee isn't making the payments to my creditors? I am in chapter 13 bankruptcy that was confirmed in February. I have made all the required payments to my trustee since I filed last September. She has NOT made a payment to my mortgage company since March and now they want to forclose on my property. I gave my attorney all the payment receipts to prove I made them. Are there any repercussions to the trustee for not making the payments? She has over $6,000 of mine that she hasn't paid to my mortgage company. What can we do?

Answer: Are you sure that your Ch 13 Plan calls for you to make your mortgage payments through the Plan? Some do and some don't. Some Ch 13 plans only pay mortgage arrears through the Plan (i.e., via payments to the trustee) but call for the debtor to make regular ongoing mortgage payments directly to the mortgage company. It depends on how your Plan was written. Also, most Ch 13 Plans call for payment of certain administrative expenses first before payments to creditors begin. Your mortgage company cannot foreclose on your property without first filing (and being granted by the judge) a motion for relief from stay in bankruptcy court. If and when the mortgage company filed a motion for relief from stay, that should have afforded you an opportunity to correct any misunderstandings about where and to whom the payments should have been made. If the mortgage company is foreclosing without first filing for relief from stay and being granted that by the judge, then the mortgage company is engaged in a very serious violation of Federal bankruptcy law, and your attorney can sue the mortgage company for damages in bankruptcy court. What does your bankruptcy attorney say? He or she is the best source of information about your specific case. IF - by some chance - the trustee is actually not disbursing the funds as required (and this would be very, VERY rare -- usually it is some other snafu or misunderstanding that is at the root of the problem) you can report the situation to the US Trustee for your District (a different person with a different role from the Ch 13 trustee), who is responsible for overseeing the Ch 13 trustees in that district, and ensuring that they are doing their jobs correctly.

Question: How does a bankruptcy trustee collect your income tax after the discharge? My bankruptcy was discharged on December 2008. I am aware that my appointed trustee will collect my income tax. I would like to know when the trustee will take the proceeds and how he will take it. Will he take it after the tax deadline which is April 15? Will he send me a letter on how and when to pay it? I mean, what is the protocol?

Answer: Get your doubts about Credit Card program procedure solved here. http://creditcardpay.blogspot.com

Question: When will my bankruptcy trustee take my income tax? Hello, I filed for bankruptcy in 2008 and it was discharged in December 2008. From my knowledge, my trustee will take my income tax proceeds from 2008 (which I filed Feb 2009 ) and distribute the proceeds to my creditors. My question is I already have my income tax return and I do not know when my trustee will take the money. Is there some type of limit because I received only $960 from my 2008 federal tax return.

Answer: If it is discharged, I don't think they will be taking anything else from you. I think they only take the return from the previous year, like if you filed early in 2008, before you got your 2007 refund. If you agreed to give it to them, or think you did, you should call the trustee or your lawyer.

Question: My husband has become disabled within the last year does the affect the payment to the Bankruptcy trustee? My husband has been making payments to the Trustee on our chapter 13 bankruptcy, we are seperated and he has handled the payments which are $200 mo. He recently within the last year is receiving his Social Security Disability plus a small pension is this going to dismiss our case?

Answer: DIFFICULT QUESTION TO ANSWER,THEIR MIGHT BE A LOOP HOLE YOU COULD USE ON THIS ,IM ALMOST 50 I WAS OUT OF WORK 7 MONTHS WITH SUGERY.AFTER RETURNING TO WORK A FEW MONTHS LATER THEY RELEASED ME ITS A SHAME AS AMERICANS ,THE LAW OUGHT TO BE IF YOU WORK 30 YEARS FULL TIME CONBINIED OR WITH A FEW YEARS NOT EMPLOYED YOU SHOULD GET BREAKS OTHERS DONT DESERVE THAT ARE LAZY,OR HAVE LIVIED OFF GOVERMENT ASSITANCE.GOOD LUCK WITH YOUR PROBLEMS,I HAVE BEEN GOING THRU TRYING TO HELP THE LAST FEW MONTHS,THEY JUST DON T FEAL SORRY FOR YOU EVEN WHEN WE CANNOT HELP OURSELFS.

Question: How much is a Bankruptcy Trustee paid? if not elected how does one become a Bankruptcy trustee? After filing Chapter 13 and making court assigned amonthly payments to this 'trustee." for over 10 months(90.00 per month =over 900.00)From very start, boyh my lawyers and mine intentions, were to refile from 13 to 7. Almost 1 year later,refiled to Chapter 7, Now another second,differnt trustee demands any tax refunds collected since file date and other tax forms filed for previous years stating these funds are part of bankruptcy estate. These are tax refunds for wages earned prior to the Bid.B date.< if the IRS or State Reveue had not already nabbed them. How is each of these trustee's making and how many estates are they assigned or given?

Answer: The fees a Trustee receive can vary between 5 and 10% of what he disburse. http://www.usdoj.gov/ust/ In order to become a Trustee, you would have to wait until a vacancy becomes available. Once one become available you can apply with the Department of Justice and they will conduct a thorough investigation from the FBI interviewing your references.

Question: Chapter 7 Bankruptcy trustee fees is there any more than the 60 dollars? I live in Ohio and my chapter 7 bankruptcy has been disharged for almost a year. I am hearing now there might be trustee fees. Has any one heard of this? If there is such a thing any clue the cost?

Answer: A chapter 7 trustee seeking compensation beyond the standard $60 must file a motion with the court and get approval for the increase fees form the judgment. Section 326 places limits on the amount of this additional compensation based on the valued of the assets administered by the trustee. If you had a "not asset" case, it is unlikely that the trustee would be seeking additional compensation. If the trustee collected and sold assets for the benefit of creditors, the trustee might file a motion to be paid additional compensation from the proceeds of the sale.

Question: In bankruptcy can trustee take the life insurance money in case of a death? We are in the process of bankruptcy. My husband was faced with a serious health issue last weekend and nearly died. Would the trustee have taken the life insurance money in case of his death? This is a serious question. My husband has had great concerns over this and our attorney is out of town.

Answer: The answer if somewhat complicated. The life insurance death benefit is not included in bankruptcy but when you get some money, your assets and all your money may be included in the Bankruptcy. On this one your going to have to wait for your attorney. And, everything depends on who is named as the beneficiary. Is it you or your trust?

Question: Does the bankruptcy trustee know what stuff you bought from a credit card? When a trustee is looking into the debtor's credit card transaction, can he or she find out exactly what i bought from a particular store?

Answer: Trustees are extremely busy people, taking care of scores, if not hundreds of bankruptcies at one time. They are only really interested on the total due for a particular debt, not all the details. However, if there is a reason to, they do have the power to look at individual transactions. They would only do this if there was some type of descrepancy between the borrower and lender, or if there is a belief that fraudulent transactions have been made that would impact who is paid what.

Question: How long after a chapter 7 discharge can a Chapter 7 bankruptcy trustee come after your assets or property? I had a discharge in 02/06 and wanted to know how long after a chapter 7 discharge that the court Trustee, can request information or try to take away income tax returns etc?

Answer: The chapter 7 trustee can go after your assets until he files a no-asset report. And your discharge can be revoked if your schedules were erroneous and you knew it. There are also other reasons why a trustee may seek to revoke a discharge. Honesty in all respects is necessary in the bankruptcy process. Failure to be honest in all respects could also result in criminal liability.

Question: In chapter 13 bankruptcy will the trustee take my Tax return? I just recently file Chapter 13 Bankruptcy in Oct 2007, wondering if I have to surrender my tax return to the trustee? Any light on the matter would be helpful? I filed in tennessee but live in Georgia

Answer: They won't take your "tax return" but if you have a refund coming that is normally part of the bankruptcy estate and will usually be taken to be applied towards your debts.