When you file for bankruptcy, you are not forced to manage your plan of reorganization on your own. Instead, there will be a trustee who is appointed by the Court to oversee your progress, participates in the case, and acts as an intermediary with your creditors. Your Chapter 13 bankruptcy attorney works with you to stay on track and communicates with the trustee for a Chapter 13 bankruptcy.
A Chapter 13 bankruptcy trustee is essentially the administrator of a plan of reorganization. They oversee the process and make sure the debtor’s plan complies with the Bankruptcy Code, that the terms of the plan comply with the Chapter 13 statute, and that the debtor is making their best efforts to pay back their creditors.
In a Chapter 13 bankruptcy, there will be a standing trustee. New Jersey is divided into three vicinages – or locations. Depending on what county you live in, you either file your case in the Trenton, Newark, or Camden vicinage. Residents of Edison file their Chapter 13 bankruptcy in the Trenton vicinage, as it is located in Middlesex County.
The current trustees are Albert Russo in Trenton, Marie-Ann Greenberg in Newark, and Andrew Finberg in Camden.
The Chapter 13 bankruptcy trustee is not the judge in the case but does have a role in the process of confirming – or approving – the plan of reorganization. The trustee will typically file an objection to anything they believe needs to be addressed in the plan prior to the court confirming it. The Trustee can make recommendations to the bankruptcy judge prior to or at the confirmation hearing. With experienced and prepared attorneys, issues in objections are often addressed before the confirmation hearing to allow the bankruptcy judge to confirm or modify the terms of the plan at that time.
When a plan of reorganization is filed with the court, the debtor has to start making payments under that plan the month after the case is filed. Those payments go to the trustee, who collects them in an escrow account for each specific debtor. Once the plan is confirmed, the trustee disburses the payments to creditors in accordance with the plan. The Bankruptcy Code and the plan control the order and method in which creditors receive payments from the trustee.
If a debtor falls behind on payments and appears unable to catch up, the trustee can file a motion to dismiss the case.
When we file your case, we propose a plan of reorganization based on what we determine you will be able to pay back to unsecured creditors. The Bankruptcy Code requires that we consider a liquidation analysis of your assets and your disposable income to determine your current ability to pay.
The trustee then reviews that plan. If they have some questions or issues with it, they can file an objection with the court saying they cannot confirm this plan until certain aspects are addressed. We then try to resolve those issues with the trustee before we get in front of the judge.
If the parties involved cannot work out a plan that is agreeable, we always have the option of making argument to the court that the plan should be confirmed despite objections. While we are very often able to resolve issues without litigation, it is very important to understand that one of the benefits of Chapter 13 bankruptcy is to confirm a plan over the objection of the trustee or creditors. Even if the bankruptcy judge does not rule in your favor, you can also appeal a final bankruptcy order.
It is important to know the role of the trustee in proposing your plan of reorganization in a Chapter 13 Bankruptcy and fulfilling your duties to carry out that plan. Gillman Capone, in Edison, can take care of the communication between you and the trustee and prosecute all of your rights in a Chapter 13 bankruptcy. Schedule a free case review to discuss your options.
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