What Is a Bankruptcy Trustee?
A bankruptcy trustee is an individual assigned by the U.S. Trustee, a representative of the Department of Justice, to represent the estate of the debtor in a bankruptcy case. Bankruptcy trustees evaluate and make referrals about different debtor demands according to the United States Bankruptcy Code.
Nevertheless, a bankruptcy judge has the final authority on the distribution of assets. A bankruptcy trustee collaborates with the bankruptcy court regarding the trustee’s actions and activities. The trustee cannot act without authorization by the court.
Office of the U.S. Trustee
The United States Trustee Program is a part of the Justice Department that works to make certain of the integrity of the bankruptcy system throughout the nation. The responsibilities and function of United States Trustees include:
- Selecting and monitoring the exclusive trustees who collect and payout funds to creditors in bankruptcy cases under Chapters 7, 12, and 13;
- Guaranteeing conformity with the Bankruptcy Code relative to information shared in cases with reports, schedules, disclosure statements, reorganization plans, as well as various other filings.
- Assessing fee applications of experts, like attorneys and accounting professionals, who serve in Chapter 11 company reorganization cases; and
- Keeping an eye on bankruptcy cases for scams or misuse, and referring criminal matters to U.S. Attorneys for prosecution.
The United States Trustee Program was produced as a pilot program by the 1978 Bankruptcy Reform Act. In 1986, Congress expanded the program from the original 18 judicial areas. It now operates in all states other than North Carolina & Alabama.
The 1986 enactment developed 21 areas, each of which is overseen by a United States Trustee. In addition to the 21 local offices, there are 95 area offices, most of which are headed by an Assistant United States Trustee.
The Executive Office for U.S. Trustees, located in Washington, D.C., looks after the United States Trustee Program’s substantive procedures and also takes care of the program’s management functions. The Director of the Executive Office for United States Trustees acts under authority from the Attorney General.
Bankruptcy is made up of federal laws. There are also policies that can assist people and companies who have more financial obligations than they can afford to pay. Each of the 94 federal judicial districts takes care of bankruptcy issues, and in most districts, bankruptcy cases are filed in the bankruptcy court. Bankruptcy cases cannot be submitted in state court. A bankruptcy trustee is an officer of the court.
Bankruptcy laws help individuals that can no longer pay their creditors get a fresh start by liquidating their assets to pay their financial obligations, or by creating a repayment strategy.
Bankruptcy legislation likewise safeguards troubled companies by attending to orderly payments to business creditors with either reorganization or liquidation. These procedures are covered under Chapter 11 of the United States Code (the “Bankruptcy Code“). The bulk of cases are filed under the 3 major Chapters of the Bankruptcy Code, which are Chapter 7, Chapter 11, and Chapter 13.
Federal courts have exclusive territory over bankruptcy matters and administering the Bankruptcy Code. This again suggests that a bankruptcy case cannot be submitted in a state court.
The primary purposes of the Bankruptcy Code
The main purposes of the bankruptcy code are:
- to give an honest debtor a fresh start in life by eliminating the debtor of most financial debts; and
- to repay creditors who have filed a proof of claim in an organized way to the extent that the individual debtor has realizable property available.
Some bankruptcy cases are submitted to allow a debtor to restructure and also establish a strategy to repay creditors, while various other instances involve liquidation of the debtor’s assets.
How does a bankruptcy case begin?
Proceedings for a bankruptcy case generally begin by the debtor submitting a petition with the bankruptcy courthouse. It might be filed by a person, jointly by spouses, or by a company or other entity. It just depends on each unique situation.
The debtor also needs to file statements listing assets, income, liabilities, and the names and addresses of all secured creditors and unsecured creditors and how much they are each owed.
The declaring of the petition automatically stops, or “stays,” collection actions by the unsecured creditors against the debtor and the borrower’s property. As long as the stay continues, unsecured creditors cannot bring or continue lawsuits, make wage garnishments, or even make phone calls demanding payment.
Both secured creditors and unsecured creditors get notification from the court clerk that the debtor has actually filed a bankruptcy petition. Some bankruptcies are filed to enable a debtor to restructure and also develop a plan to settle with creditors. Other situations involve liquidation of the debtor’s assets.
In numerous bankruptcy situations involving liquidation of the property of individuals, there is little or no cash readily available from the debtor’s estate to pay creditors. Because of this, in these instances, there are not many concerns or disagreements, and the debtor is typically granted a discharge from the bankruptcy without objection. Upon receiving a discharge, the debtor is no longer liable for paying off the debts.
The bankruptcy trustee and Bankruptcy court litigation
In various other situations, however, conflicts might trigger lawsuits in a bankruptcy case over such issues as:
- who has certain assets;
- how it ought to be made use of;
- what the property is worth;
- how much is owed on a debt;
- if the debtor ought to be released from particular financial obligations; or
- just how much money needs to be paid to legal representatives, accountants, auctioneers, or various other professionals.
When an issue leads to litigation in the bankruptcy court under the bankruptcy code is conducted in much the same way that civil cases are tried in district courts. There may be under bankruptcy law lawsuits discovery, pretrial proceedings, settlement discussions, and if settlement discussions do not work out, then there is a trial.
United States Bankruptcy Court of Arkansas
In Arkansas, there are two divisions of the Bankruptcy Court that deal with a bankruptcy petition; East & West. Below, including the links, is a listing of the various Arkansas officials that act as a bankruptcy trustee. The information is not created by us. It is created and maintained by various public and private organizations, including, the U.S. Bankruptcy Court and the United States Courts in general.
These web links are offered for the reader’s use. We do not regulate or assure the precision, relevance, timeliness, or completeness of this information; nor do we manage or assure the on-going reliability, maintenance, or safety and security of these links and the websites they lead to. The inclusion of web links is not intended to show their importance or to support any information revealed, or services or products used or offered on these external sites, or the parties operating the sites.
Bankruptcy Trustee Information – Source: United States Bankruptcy Court – Eastern & Western Districts of Arkansas
To access the United States Bankruptcy Court – Eastern & Western Districts of Arkansas bankruptcy trustee information, please CLICK HERE. You will see that there is not a United States Bankruptcy Court in Eureka Springs, AR.