Bankruptcy Basics

The Four Main Players in a Bankruptcy

In every bankruptcy case there are at least four different players.   

1. The Debtor – The debtor, you,  is represented by your attorney. Your role is to be honest and forthcoming in your bankruptcy petition. Your attorney marshalls these facts in a specified manner and strategy to enable you to receive a discharge under the Bankruptcy Code.
2. The Trustee – The Trustee investigates the financial affairs of the Debtor, collects monies available to be distributed to creditors, and may oppose the discharge of the Debtor. Certainly, creditors can also enter an appearance and make sure their specific voice is heard. The trustee speaks for the best interests of parties in interest.  
3. The United States Trustee – They are distinct from the Trustee assigned to your case. The United States Trustee is a branch of the Department of Justice that acts as a passive prosecutor. They receive a copy of all documents filed in your case and receive recordings of your 341(a) creditor’s hearing. They review each case to help make sure that the bankruptcy laws are complied with and there is no evidence of fraud or abuse. If there is any evidence of fraud or abuse, the trustee or the Trustee’s Office will investigate and prosecute as appropriate.
4. The Bankruptcy Court – the Court reviews everything and resolves any disputes between the parties that they cannot resolve themselves by way of consent. For example, you default on your car loan and they accelerate the payments on it and file a proof of claim claiming they are owed the full amount due and owing on the promissory note, plus attorney’s fees and other incidental costs. You argue that the amount due and owing is not the full accelerated amount and the attorney’s fees are unreasonable and burdensome. Both sides file motions and briefs and both make valid legal arguments based on the law. It is up to the Court to determine which side will prevail and on which issue.   

The law firm of Long & Long, P.C. have decades of combined experience in bankruptcy. Martin Long is a former Chapter 7 Trustee, ensuring that clients’ rights, property, and money is protected from creditors and others. Call Long & Long, P.C. now at (303) 832-2655.