Chapter 7 Trustee

The chapter 7 trustee is a private party who is appointed by the US Trustee’s Office to oversee chapter 7 cases.  Most chapter 7 trustees are attorneys, but some are CPAs or people with backgrounds in business.  The chapter 7 trustee conducts the 341 meeting of creditors, reviews the petition for accuracy, collects and liquidates assets, makes the asset report to the court, and reports suspected fraud to the US Trustee’s Office.
When you file chapter 7, you will be automatically assigned a chapter 7 trustee.  Local bankruptcy lawyers will talk about a trustee being a “Seattle chapter 7 trustee,” a Tacoma Chapter 7 Trustee,” or an “Everett chapter 7 trustee.”  This is because the trustee is assigned based on the county that the debtor lives in at the time of filing.
What Will The Chapter 7 Trustee Do In My Case
Debtors often worry that the chapter 7 trustee is going to be mad at them or try to punish them for filing bankruptcy.  That is not true.  The trustee has a job to do.  Sometimes that job puts them at odds with a debtor, because the trustee has to liquidate an asset, report that someone is not eligible for bankruptcy, or report suspected fraud.  This is not personal.  If the trustee does not do their job, the US Trustee will remove them from the panel of trustees.
The goal is for the chapter 7 trustee to do nothing in your case; or at the very least, to do nothing unexpected.  Here are some tips for making sure that your case goes smoothly:

• Make sure that your bankruptcy petition is complete and accurate.  Trustees know how to find hidden property.
• Make sure that you use accurate values for your property.  The trustee knows when someone has dramatically undervalued a car or piece of real property.
• If you are working with an attorney, you should know ahead of time if there is any risk that the trustee will want to liquidate property.
• If there is an inaccuracy in your petition, make sure that you fix it as soon as your find out about it.  Ignoring errors or waiting to fix them is a recipe for disaster, especially if the trustee finds out about the error before you have a chance to fix it.

How Do I Deal With The Chapter 7 Trustee
Chapter 7 trustees have anywhere from dozens to hundreds of open cases at any one time.  They are paid $60 per case, plus a percentage of whatever they recover for the benefit of the bankruptcy estate.  It is a very difficult job and one that requires them to be very efficient.  As a result, a chapter 7 trustee will start each 341 meeting with a series of instructions.  Those instructions are designed to keep everything moving quickly and to identify the information that the trustee needs to do their job.
There are a few ways to make sure that your relationship with the trustee goes smoothly:

• Make sure that you submit the Rule 4002 documents to the trustee on time.  If you have an attorney, they will submit the documents for you.
• Make sure that you arrive for the 341 meeting on time.  I suggest that you plan to get there about ten minutes ahead of time.  Parking in Seattle and Tacoma can be tricky, so give yourself plenty of time.
• Have your photo ID and proof of social security number in your hand and ready when your case is called.  I suggest that you take them out while the trustee is making their introductory announcements.
• Listen to the trustee’s introductory announcements.
• Most of the questions only require a yes/no answer.  If the trustee wants more information, they will ask for it.

What If The Chapter 7 Trustee Is Wrong?
Just because the chapter 7 trustee says something doesn’t mean it is true.  The trustee is not a judge.  When there is a dispute that you can’t settle, the bankruptcy judge makes the decision.  If a trustee breaks the law, is excessively rude, or is unprofessional, the bankruptcy court or the US Trustee’s Office can take action against them.  Here are some tips for dealing with a chapter 7 trustee dispute.

• It’s not the trustee’s fault if your lawyer screwed up.  I get a lot of phone calls from debtors who are mad at the trustee and think the trustee is out to get them, but it turns out their lawyer was the one who made the mistake.
• You may challenge any liquidation or seizure of property.  However, the court will not stop the trustee from sending an appraiser to value your house, your car, or your other property.
• There is a time and place for everything.  Remain calm and respectful during the 341 meeting.  Losing your temper in a 341 meeting doesn’t work.  If push comes to shove, you can put the issue in front of the bankruptcy judge.