Many of our clients come to us thinking that when they file bankruptcy they will have to appear before a judge. In the vast majority of cases, you will never have to appear before a judge. Instead, you will make an appearance, usually just a single appearance, before a Court appointed bankruptcy trustee. The meeting before the trustee is in a rather informal conference room. It is not a courtroom. Your lawyer will be present with you to make sure everything goes smoothly. The meeting will usually last about 2-5 minutes. Depending upon the number of cases set for the particular calendar date and time of your appearance, you may have to wait anywhere from 1 minute to 60 minutes until your case is called.
What Is a Bankruptcy Trustee and Will I Have to Talk to a Judge?
A bankruptcy trustee is a person appointed by the Court and United States Trustee to oversee your case and has a fiduciary duty to review your petition, schedules and statements, and the supporting due diligence documents that you and your lawyer will provide to the trustee. (See documents needed to file bankruptcy.) Assuming that all your documents are in order and your case is prepared properly and executed flawlessly, as an experienced bankruptcy attorney will be able to do, your meeting will end with the trustee giving his or her stamp of approval to your filing.
Trustee in Chapter 7 Cases
In Chapter 7 cases, the trustee's main function is to verify that your assets, debts, income and expenses are accurately disclosed in your bankruptcy. Also, if you have more assets than you are allowed to have when you file, the Chapter 7 trustee's function will include liquidating and selling your nonexempt assets (assets that are greater than the amount of assets you can keep when you file bankruptcy.) Once the Chapter 7 trustee gives his or her approval to your Chapter 7 case and your documents it generally means that your case will be completed and you will receive a discharge in about 90 days after you filed your case, assuming that there are no other objections by creditors.
Trustee in Chapter 13 Cases
In Chapter 13 cases, the trustee's role will also include making sure that your plan is prepared flawlessly and that all confirmation requirements are met. And here I should mention that preparation of a perfect plan is a tall order and many Chapter 13 plans are routinely rejected. Indeed, Chapter 13 plans often rise and fall depending on the level of experience of the lawyer that you choose. There are usually two extremes. You can hire an inexperienced lawyer who offers a reduced fee (commensurate with his or her experience) and expect a plan that will be rejected, or you can hire an experienced bankruptcy law firm that has a slightly higher fee and will prepare a plan that will be confirmed (accepted).
Trustees Want Your Case to Go Smoothly
Some attorneys fear the meetings with the trustees, because the trustees have the power to object to a bankruptcy case and judges will give great weight to the objections of a trustee. However, the trustees only object when there is a problem. The don't look for or create problems. In fact, the trustee assigned to your case should be viewed as friend rather than a foe. Trustees only object to improper bankruptcies or improperly prepared bankruptcies. If your case is prepared properly, executed flawlessly, and brought in good faith, there is no reason to fear the trustee. To the contrary, the trustee can be very helpful by giving his approval to your bankruptcy, leading to a quick and timely granting of your discharge by the Court. It is in the trustee's best interest, as well as yours, for your case to go smoothly.
Experience Is Crucial
An experienced bankruptcy lawyer in your district (example, the Southern District of California, covering all of San Diego County, California) will have appeared many times before the Chapter 7 trustees and Chapter 13 trustees in your district and will be familiar with their attitudes and how they decide cases, all of which must be taken into account in preparing your bankruptcy. Make sure your attorney is not only experienced but is keenly familiar with the local practices of the trustees in your district, so that you do not fear the trustee, but rather look forward to joining your attorney in making your appearance before the benign bankruptcy trustee.