I was recently appointed to the Panel of Chapter 7 Trustees for the Northern District of Illinois, and am hearing my first cases as Trustee. Even though I have been a practicing attorney in the US Bankruptcy Court for over 30 years, representing Debtors and Creditors, there is a lot to learn in this new role. I will still continue to represent Debtors and Creditors in addition to being trustee in other cases.
Here is a basic overview of what a Chapter 7 Panel trustee does:
The US Bankruptcy Court is a system that balances the rights of Debtors (people or corporations who file for relief from their debts), and Creditors (those who are owed money). The other parties to the process are the Court, and the Trustee. Once a person or entity files for Bankruptcy protection under Chapter 7, the Court clerk appoints a person from the Panel of trustees for that district.
That Trustee (overseen by the U.S. Trustee) is assigned to review all of the documents filed with the Court, including the Bankruptcy Petition for Relief, and other documents such as proof of identity, income and tax returns.
Approximately 30 days after the Bankruptcy filing, the Trustee conducts a “Meeting of Creditors under Section 341 of the US Bankruptcy Code. (Called a “341 Meeting” for obvious reasons). The Trustee then asks a series of questions, under oath, to verify the Debtor’s identity, and the accuracy of the Petition.
The Trustee is responsible for:
- Verifying the identity of the Debtor
- Reviewing the accuracy of the documents submitted to the Court
- Examining the Debtor and corresponding documents to determine whether the Debtor owns any assets which can be sold and “liquidated” for the benefit of creditors.
- If there are no assets, the trustee files a report with the court.
- If there are assets to liquidate, to obtain funds, keep an accounting of such funds, hire any professionals that are necessary to obtain the funds, and distribute the funds to the creditors.
- The trustee is required to obtain Court approval of the retention of professionals, and any distribution.
- The trustee is paid based on a percentage of the assets distributed to the Creditors.
I will be conducting these hearings as an officer of the US Bankruptcy Court, a very important role. My job is to be professional, courteous to all parties, and efficient. The Bankruptcy Court System relies on the trustees to use their discretion in making many decisions. I intend to use that discretion to make the system work as well as possible for all parties. I look forward to being “on the other side of the desk” as I navigate my new role!
Daniel J. Winter
BankruptcyLawChicago.com
312-789-9999
