Who is the Trustee, anyway?

The U.S. Bankruptcy Court, Central District of California says that “The Office of the U.S. Trustee is not part of the bankruptcy court but is an agency of the Department of Justice whose main role is to monitor the administration of bankruptcy cases, detect bankruptcy fraud, and appoint/supervise a group of trustees who can administer chapter 7, 11, or 13 bankruptcy cases. The Office of the U.S. Trustee is divided nationwide into 16 regions, and each region is supervised by one person whose title is ‘United States Trustee.’ The U.S. Trustee generally has the right to be present at any court hearing and can make motions and recommendations to bankruptcy judges.”

What is their primary role?

In a chapter 7 bankruptcy case, a trustee is appointed to review the financial information of the debtor, take control of the assets of the debtor, and sell or distribute these assets for the benefit of creditors. A trustee can also recover certain assets that were previously transferred and bring those assets into the bankruptcy estate.

In a chapter 13 case, a trustee is appointed to review the documents filed in the case, collect payments, monitor activity in the case and to report to the court on how well a debtor is meeting his or her obligations. If a debtor is not meeting obligations, the trustee can ask the court to dismiss the bankruptcy case.

In both chapter 7 and chapter 13, the trustee conducts the meeting of creditors to question the debtor about the documents filed and allow creditors to ask questions.

Can the Trustee Share My Information?

No. As with attorneys, trustees are not able to share your information with others outside of your case. That means, that even after a bankruptcy case has been discharged, a trustee cannot discuss your information with anyone at any time for any reason, except when it is necessary to your case.

This is just a basic overview and is not legal advice specific to your situation. If you are considering bankruptcy or are feeling overwhelmed by debt, you should speak with an attorney in your area for legal advice. If you live in California and would like to speak with Jen Lee Law regarding your situation, please email me at jen@jenleelaw.com or call 925-586-6738.

Living in California, where housing prices are very high compared to most parts of the country, this issue comes up more often than you would think.  For 2016, the limits are $1,184,000 for secured debts (such as mortgages, car loans, etc.) and $394,725 for unsecured debts (such as credit cards, student loans, some taxes).

What happens if you have too much debt for a Chapter 13? Sometimes, you can attempt a Chapter 11 filing, depending on what you are trying to reorganize and the nature of your debts.  In other cases, there are strategies that can be used to file a Chapter 13 after dealing with some of the debts or filing a separate bankruptcy from your spouse.  There also may be options for how your debt is categorized that may help you qualify for Chapter 13 relief.

Chapter 7 does not have debt limits.  However, a Chapter 7 is also used for very different reasons than a Chapter 13 and you may end up having to liquidate assets in a Chapter 7 (like selling real property or other assets) if the trustee determines that there are non-exempt assets that would benefit your creditors.

It is very important that you talk to an attorney before deciding if you should file bankruptcy and if so, what chapter you file under.  Understanding all of the options and whether you qualify will help you make the best decision for your situation.

This is just a basic overview and is not legal advice specific to your situation. If you are considering bankruptcy or are feeling overwhelmed by debt, you should speak with an attorney in your area for legal advice. If you live in California and would like to speak with me regarding your situation, please email me at jen@jenleelaw.com or call 925-586-6738.

Post #1
“Don’t pay an attorney money just to show up for 5 minutes in a suit. Pay a non-attorney money to prepare your documents instead.”

So, the basic point of this advertisement is that the only thing the attorney is good for is showing up at your meeting of creditors after the bankruptcy is filed. If that is all your attorney is doing for you, then you probably overpaid.

These are some of the things that an attorney can do for you that the non-attorney preparing your documents cannot:

1. Tell you whether you even qualify for bankruptcy (known as legal advice).
2. Explain the process and advise on which exemptions to use to protect your assets.
3. Walk you through both bankruptcy and non-bankruptcy options based on your situation.
4. Prepare and advise you on the process for hearings.
5. Represent you at the required hearings.

A non-attorney can only type up forms and can only type on those forms what you tell him to type, not tell you what you should put on the documents. The actual preparing of the documents is a very small part of the bankruptcy process. That leads me to…

Post #2
This post was about someone looking for a bankruptcy attorney to help them because a paralegal gave them legal advice that was absolutely wrong and now the trustee is going after assets to sell.

In this case, it appears that the person who filed for bankruptcy had no intention of going through with it and just wanted to postpone a foreclosure sale. Unfortunately, there are non-exempt assets that the trustee is now interested in and the case cannot be dismissed.

At this point, it will cost a lot more money to hire an attorney to come in and fix the situation (if it can be fixed) than it would have cost to hire competent legal counsel to prepare the case properly. There is also the possibility that it cannot be fixed and the trustee will sell the assets – that could be your house or your car or the court will require you turn over insurance proceeds or money in a bank account.

You’re Just Saying This So You Have More Clients, Right?

Nope. I am not saying you have to hire me as your attorney. I just hate to see good people end up in horrible situations that could easily have been avoided with the right information and knowledge. It is very frustrating for me to not be able to help someone after the case has been filed because of bad or improper advice.

If you would like to meet with me, I am more than happy to go over all of the options available to you and look at what your goals are to see if we can come up with a solution to address as many of your financial issues as possible. I mostly want consumers to be informed and educated before making decisions that cannot be undone.

This is just a basic overview and is not legal advice specific to your situation. If you are considering bankruptcy or are feeling overwhelmed by debt, you should speak with an attorney in your area for legal advice. If you live in California and would like to speak with me regarding your situation, please email me at jen@jenleelaw.com or call 925-586-6738.

Collection agencies are calling and sending notices.

It is easy to get overwhelmed by the amount of collection mail and not open any of it. It is also easy to ignore all of the phone calls coming in. Ignoring the initial collections can result in a lawsuit against you, which can be even harder to deal with.

You were just served with a lawsuit.

A lawsuit is now pending for debt collection. If you have been served with a summons for a lawsuit filed by one of your creditors, you have a limited time to respond to the lawsuit. If you do not respond, the collection firm will likely win a default judgment against you and can then move to garnish your wages and/or bank account or put a lien on your house.

You are relying on credit cards to pay for living expenses.

This is one of the earlier warning signs because it means that your credit card bills are increasing, but you do not have any money to keep up with them. If you are using one credit card to pay another credit card each month, it may be time to consider some long-term planning. Making just the minimum payments on credit cards also ties into this warning sign.

Your mortgage payments are behind or are often paid within the “15-day grace period” each month.

If you are more than a month behind on your mortgage, it can be very difficult to catch-up because most banks will not take your payments until you pay the full amount due – they won’t take partial payments. This often leads to a downward spiral where you are several months behind. Talking to a bankruptcy attorney can help you organize your options for keeping the house, as there may be several strategies that can be used to make your loan current again.

Your wages or bank accounts have been garnished.

Once a creditor obtains a judgment against you, they will start looking for money to pay the judgment. One of the most common ways to do that is to garnish your wages. If you are already having problems making ends meet and then 25% of your paycheck disappears, that is a significant hardship. It is almost always better to talk to a bankruptcy attorney long before your debts get to this stage.

If I call a bankruptcy attorney, does that mean I have to file bankruptcy?

Absolutely not. Part of the first meeting is for us to review your financial situation and discuss all of the options available to you, including non-bankruptcy options. My goal is to outline as many options as possible and explain the pros and cons of each route. The decision to file for bankruptcy will always be yours to make.

Bankruptcy is not a one-size-fits-all proposition, but it is a useful and flexible tool for many different situations if properly planned. If you are struggling to make ends meet and are overwhelmed by debt, please contact me to schedule an appointment.

This is just a basic overview and is not legal advice specific to your situation. If you are considering bankruptcy or are feeling overwhelmed by debt, you should speak with an attorney in your area for legal advice. If you live in Alameda County, Contra Costa County, Santa Clara County, or San Joaquin County and would like to speak with me regarding your situation, please email me at jen@jenleelaw.com or call 925-586-6738.