What is the bankruptcy trustee’s role?
June 29, 2022
By Diane Drain Attorney & Retired Law Professor
For payments paid into the plan, the Trustee serves as the disbursing agent. The Trustee also evaluates the plan and challenges those that do not, in the Trustee’s opinion, fulfill the Bankruptcy Code’s criteria for confirmable plans. Most of the Trustee’s objections will be anticipated by an experienced bankruptcy attorney, who will address them in the Plan, or amended Plan. Even if the Trustee and the debtor cannot agree on the provisions of the plan, the plan may be confirmed by a judge.
Once the plan is approved, the trustee pays creditors on a regular basis using the debtor’s plan payments. Before the Plan is finalized, the Trustee makes necessary adequate protection payments. These would be payments to your vehicle’s lender, for example. §1326(a) (1)(B). Normally, all debts owed at the start of the case must be paid through the trustee, with the exception of current mortgage payments and some leases.
About the Author: Diane Drain
Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.
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