When a client files for chapter 13 bankruptcy in St. Louis, MO, the court may ask a trustee to fulfill certain duties. A court-appointed trustee is an impartial third party who performs certain tasks on the creditor’s behalf. In some cases, trustees may be appointed by creditors as well. Appointment of a bankruptcy trustee helps ensure that funds are disbursed in a neutral and responsible manner.
Tasks Performed by the Trustee in Chapter 13
A chapter 13 case involves the restructuring of a debtor’s finances to allow the gradual repayment of creditors. Therefore, much of the trustee’s job involves financial reorganization, and duties of the trustee may include:
* Review of the debtor’s finance and repayment plans.
* Acceptance of payments from debtors.
* Disbursing payments proportionally to creditors.
* Acting as an impartial mediator between debtors and creditors.
* Supervision of financial meetings.
* Review of claims by creditors.
In doing their job, the trustee helps to enforce bankruptcy law. The trustee often notifies the court if any party violates their agreements.
If a Debtor and a Bankruptcy Trustee Have a Dispute
As with other trustee arrangements, a bankruptcy trustee must follow guidelines, especially where financial decisions are concerned. For example, a trustee cannot comingle debtor payments with their own accounts. Additionally, the trustee cannot disclose any party’s private information without consent.
If a trustee violates their duties, further litigation may result. A common scenario occurs when a debtor sues the bankruptcy trustee because financial mishandling led to significant losses. In these cases, the debtor may be eligible for monetary damages. Debtors in this situation should consult Van Dillen & Flood, P.C. to learn about their legal rights.
Do Clients Need an Attorney’s Help in Chapter 13 Cases?
Bankruptcy trustees must fulfill a very specific set of standards concerning their responsibilities to creditors and debtors. A client may need an attorney’s help where trustee and bankruptcy laws are concerned. Attorneys can inform clients of their rights throughout the process of chapter 13 bankruptcy in St. Louis, MO, and they can provide guidance should the client need to file an additional legal claim due to a trustee’s misconduct.
