A Chapter 13 Trustee is appointed by the United States Department of Justice — United States Trustee program pursuant to 28 USC Section 586. The function of a Chapter 13 Trustee is to monitor and administer bankruptcy cases within a geographical area. The Chapter 13 Trustee in Akron, Ohio, monitors and administers bankruptcy cases which are filed in Akron, Ohio, for Summit, Portage, and Medina Counties.

Neither the Chapter 13 Trustee nor the Trustee's staff is permitted to give individual legal advice to either debtors or creditors. The role of the Trustee is to review all the financial information submitted by the individual seeking bankruptcy reorganization, and to review the claims filed by creditors. It is the Trustee's fiduciary duty to review said information supplied by the debtors and the creditors to evaluate a case for confirmation.

If the Trustee believes that there has been honest disclosure of all the individual's income and assets, and if there are no outstanding objections to the reorganization by creditors, the Trustee will recommend the plan for confirmation. The United States Bankruptcy Court confirms or denies confirmation of a Chapter 13 bankruptcy reorganization. The Trustee's duty is to recommend to the Court on whether or not a case should be confirmed or dismissed. The Court may accept or reject the Trustee's recommendation.

An individual seeking Chapter 13 bankruptcy reorganization should consult with a knowledgeable and competent attorney before filing a Chapter 13 case. While an individual may represent themselves Pro Se, very few individuals acting on their own behalf are successful in a Chapter 13 plan. Often times said individuals do themselves harm by not preparing their bankruptcy petition correctly. Said harm can include losing their home to foreclosure actions or liquidating assets which the individual could keep if the bankruptcy petition were completed correctly. The Chapter 13 Trustee cannot give individual legal advice to individuals seeking reorganization so if an individual does not fill out a petition correctly, the Trustee will move for dismissal of the case, or a creditor may move for more severe action against the individual's assets.

If the individual has decided to do a Chapter 13 bankruptcy the following is designed to illustrate the appropriate process and hopefully remove some of the confusion surrounding Chapter 13 bankruptcy. Despite some newspaper stories, it is not true that individuals are allowed to keep all of their assets while only paying a creditor a few cents on the dollar. The amount paid to creditors is actually determined by the individual's net assets.

In a Chapter 13 the individual must pay either an amount equal to the net assets into the Chapter 13 plan or a minimum three years disposable income, whichever is greater. Chapter 13 bankruptcy plans may extend for a period not to exceed 60 months.

To be eligible for Chapter 13 bankruptcy, the individual must have a regular source of monthly income. Said income can include wages, self-employment income, social security, pension or other sources of income which are regular in nature.

If an individual has decided to seek bankruptcy reorganization but does not know whether to file a Chapter 7 or Chapter 13 plan, said individual is encouraged to speak with an attorney knowledgeable in bankruptcy law.

When making an appointment to see an attorney, it will be necessary for the individual to compile all of their financial information so that the attorney can advise the individual on their bankruptcy options. Financial information will include current pay stubs, most recent tax returns, and a complete list of all the individual's outstanding financial obligations.

Most law firms which do bankruptcy work will provide the individual a worksheet prior to the initial consultation so that the appropriate information is supplied to the attorney to evaluate the individual's financial position.

Individuals who are self-employed will need to supply a balance sheet and income statements for the business in order for the attorney to evaluate their financial options. The Trustee will require that balance sheets, income statements, and business tax returns be supplied to the Trustee so that the Trustee may do an independent evaluation of the debtor's financial information and determine whether or not the individual's bankruptcy reorganization is practical given the individual's financial resources.

Some individuals, prior to filing bankruptcy, may try to make payments to certain creditors or to pay back loans which the individual has received from family members. Said repayment of loans prior to filing bankruptcy can be deemed a preference and the individuals receiving said funds may be required to return the funds to the Trustee so that the funds may be used for all creditors under the individual's bankruptcy reorganization. It is in the individual's best interest to consult with their attorney before making any preference payments to creditors.

After filing a bankruptcy, the individual will be required to attend what is called a "341 meeting". A 341 meeting is an opportunity for the bankruptcy trustee and the individual's creditors to ask questions concerning the individual's assets and income disclosed on the bankruptcy petition. The individual is required to be honest and truthful in answering said questions. The individual will be placed under oath at the 341 meeting so any misleading or false statements made by the individual can result in appropriate sanctions which could include a referral to the United States Department of Justice — United States Trustee Civil Enforcement Program.

The 341 meeting will also be an opportunity for the individual to ask questions of the Trustee. Additional education material will be supplied by the Trustee during the 341 meeting. If the individual is confused about any of the information received from the Trustee or has questions about the 341 process, the individual is encouraged to ask questions of the Trustee concerning the bankruptcy process. It is imperative and required that individuals attend the 341 meeting and that said individuals must bring proof of identification (drivers license or other photo identification) and proof of social security number.

Creditors will have ninety days from the 341 meeting to file proofs of claim (claims of governmental entities will have 180 days to file a claim). Twice a year, the Chapter 13 Trustee will supply the individual a ledger which will reflect all of the individual's payments into the Chapter 13 plan and all of the payments made by the Chapter 13 Trustee on the individual's behalf. If at any time an individual feels that all of their payments have not been recorded on the Trustee's records the individual should bring that issue to the Trustee's attention. Furthermore, the individual is encouraged to review the list of creditors who have filed a claim in the bankruptcy case. If it appears that a creditor has filed a claim for the wrong amount or if a creditor has filed a claim against the individual and the individual has never had contact with said creditor, then an objection should be filed to that claim. An objection can be filed to the claim by the individual immediately contacting their attorney and explaining that a creditor has filed a claim which the individual believes should not be paid in their Chapter 13 reorganization. If the individual remains silent, the claim will be paid by the Trustee as filed.

After the 341 meeting, the Trustee will evaluate all the financial information supplied by the individual. The Trustee may have further questions and request further documentation from the individual. At the conclusion of the 341 meeting, after the Trustee has completed reviewing the financial information, and absent any objection to the plan of reorganization by creditors, the Trustee will recommend confirmation of the plan. Confirmation is a term which means the Trustee will recommend approval of the individual's bankruptcy reorganization. The United States Bankruptcy Court will consider the Trustee's recommendation. It is the United States Bankruptcy Court which confirms or denies confirmation of a bankruptcy case and the United States Bankruptcy Court may accept or reject the Trustee's recommendation.

After the plan has been confirmed by the United States Bankruptcy Court, the individual is required to make Chapter 13 plan payments monthly into the Chapter 13 plan. If the individual is regularly employed, the individual must make their Chapter 13 payments by way of payroll deduction. If at any time during the Chapter 13 plan, which can last up to five years, the individual believes that they cannot make their Chapter 13 payment or if unexpected expenses arise (unexpected car repair, unexpected medical expense) the individual can seek a suspension of their Chapter 13 payments. Said suspension can be obtained by having the individual contact their attorney so that an appropriate order of suspension may be entered by the United States Bankruptcy Court. A suspension of payments will hold the Chapter 13 plan in abeyance but will extend the conclusion of the plan. If the individual simply stops making payments and does not ask for a suspension of a Chapter 13 plan, the Trustee may move for dismissal of the plan.

If the Chapter 13 plan is dismissed, the individual's creditors may return to state court and enforce foreclosure and collection actions against the individual's assets and income pursuant to applicable state law. Furthermore, dismissal of the case has the legal effect of voiding a bankruptcy plan. When a Chapter 13 bankruptcy plan is filed, unsecured creditors (credit card companies) must stop charging interest on their claims. However, if the plan is dismissed, the credit card companies may post all of the money paid through the Chapter 13 plan to interest and still try to collect the full principal amount from the individual pursuant to applicable state law. Dismissal is a very serious consequence of a Chapter 13 plan, especially for an individual who has paid in significant sums of money in an attempt to reorganize their debt. It is imperative that said individual keep in contact with their attorney should a situation arise in which the individual needs a payment suspension.

At the conclusion of a Chapter 13 case, the individual will earn a discharge of their plan. A discharge will have the legal effect of discharging all debt which was provided for under the Chapter 13 bankruptcy plan of reorganization. Creditors may not seek collection actions against the individual for debt which has been discharged in the plan. To earn a discharge, it is imperative that all creditors be listed. For instance, if the individual forgets to list the ABC Company in said plan, ABC Company's debt may not be discharged upon conclusion of the Chapter 13 case.

At the conclusion of a Chapter 13 plan, the Chapter 13 Trustee will issue appropriate orders to stop the employer deduction and request that the United States Bankruptcy Court issue a discharge to the individual who has successfully completed their Chapter 13 plan.

It often takes 60-90 days for a plan to completely discharge and for the Trustee to complete administration. If employer deductions continue to come to the Trustee after the individual has earned a discharge, said funds will be returned to the individual.

At the conclusion of the case, the Trustee will issue a final accounting to the individual so the individual can see all funds that were paid into the plan and how said funds were disbursed to the individual's creditors. Separately, the United States Bankruptcy Court will issue the individual an order of discharge. It is advisable that individuals keep their Trustee's Final Accounting and Discharge orders in a secure place (safety deposit box). Said documents may be necessary for the individual to apply for credit in the future. It can be costly and time consuming to obtain copies of said reports if the individual does not retain the original copies sent by the Chapter 13 Trustee and the United States Bankruptcy Court.