When you file for bankruptcy, a “Trustee” is appointed to your case.
It’s essential to understand the role of the trustee and who they “work” for.
Although the court appoints the trustee, the trustee’s job is to get as much property as possible to be sold and the proceeds distributed equitably to your unsecured creditors, according to “priority” rules — determining who gets paid first — under federal and state law.
Almost all of your dealings with the bankruptcy court will be with the trustee assigned to your administering your case, not the bankruptcy judge.
The bankruptcy judge is only there to rule on disputed legal issues and issue your “discharge” order — the piece of paper that officially cancels your debts upon completing a successful filing — which is the ultimate goal of bankruptcy.
What does the Trustee do in a Chapter 7 case?
Bankruptcy Code § 323 states that the trustee is the representative of the “bankruptcy estate” with the capacity to sue and be sued.
The Bankruptcy Code defines the trustee’s duties and obligations:
- Section 704 defines the statutory duties of the trustee in a Chapter 7 bankruptcy case, and, under § 704, the primary task of the trustee is to “reduce to money the property of the estate for which such trustee serves” that is: to “liquidate” the assets and distribute the proceeds to your creditors. (Note this the job in Chapter 7 (“liquidation”) bankruptcy is different than it is in Chapter 13 (“pay over five years”) bankruptcy.
- Other relevant duties include ensuring that the debtor performs their intention (regarding secured debts) as specified in § 521(a)(2)(B) (See debtor’s “statement of intention” as provided in Form ____),
- investigate the financial affairs of the debtor (see, “What is a 341 meeting?”),
- and “if advisable, oppose the discharge of the debtor.” (see “What kinds of debts can be discharged in bankruptcy?” and “Things that might make your bankruptcy case fail.")
How Are Trustees Paid?
Bankruptcy Code § 326 says that a trustee’s compensation is based upon a percentage of the property of the estate the trustee administers. As a result, a trustee has a financial incentive to maximize the property of the estate. Consequently, discussions or disputes with a Chapter 7 trustee will primarily focus on what is property of the estate.
How Trustees Can Increase the size of the “Bankruptcy Estate.”
The whole point of bankruptcy is ensuring everyone gets their rightful share of the “pie” when there’s not enough pie. Or, to put it a more legal way: to provide an orderly distribution of available assets (“the pie”) to all creditors based on the priority outlined in federal bankruptcy law.
The trustee’s job is to make that “pie” as large as legally possible. What follows is a list of ways they can try to do that.
Undoing “Preferential Transfers” That You Made Before Filing
One tool the trustee has is the authority to undo any “preferential transfers.” That is, any money or property you transferred to someone else just before (generally up to 180 days before) filing bankruptcy.
Under this power, the trustee will be very interested in undoing any recent repayments of debts you made to your relatives or friends just before you filed for bankruptcy, as these are called a “preference.”
The trustee can reverse these transactions (i.e., claw the money back) and reclaim it for the “bankruptcy estate” because, by repaying these people before just going bankrupt, you have “preferred” some people you owe money to over others -- and bankruptcy does not allow this, because bankruptcy law has strict rules about who gets priority when it comes to claiming any available assets you may have.
Wiping out invalid liens on your property to increase equity to be distributed to creditors
Suppose you own a house with a second mortgage or have several liens on your property. In that case, the trustee may look to “void” some of those liens if doing so will increase your home equity to the point that it is no longer fully protected by applicable homestead exemption laws.
Who Are the Trustees for Illinois Central District Bankruptcy Court?
To find the contact information for trustees in your state who handle Chapter 7 cases:
Click here for a list of Chapter 7 trustees for Illinois from the US Department of Justice.
Once you bring up this list, find the Illinois trustees for the Illinois Central District Bankruptcy Court.
ILLINOIS
- Note: The individuals listed are private parties, not government employees.
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TRUSTEE(S) COVERING THE CENTRAL DISTRICT OF ILLINOIS
- Charles E. Covey
700 Commerce Bank Building
Peoria, IL 61602
Phone: (309)674-8125
- Andrew S. Erickson
P.O. Box 438
Decatur, IL 62525 -0438
E-mail: aetrustee@aericksonlaw.com
Phone: (217) 425-1515
- James R. Inghram
WCU Building
510 Maine St., Ste. 806
Quincy, IL 62301
Phone: (217)222-7420
- Roger L. Prillaman
220 W. Main Street
Urbana, IL 61801
Phone: (217) 384-1300
- Jeana K. Reinbold
P.O. Box 7315
Springfield, IL 62791 -7315
E-mail: jeana@jeanareinboldlaw.com
Phone: (217) 241-5629
- Jeffrey D. Richardson
132 S. Water Street, Suite 444
Decatur, IL 62523
Phone: (217)425-4082
- Charles E. Covey
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TRUSTEE(S) COVERING THE NORTHERN DISTRICT OF ILLINOIS
- Richard S. Alsterda
70 West Madison, Suite 3500
Chicago, IL 60602 -4283
E-mail: rsalsterda@nixonpeabody.com
Phone: (312) 977-9235
Fax: (312) 977-4405
- Ira Bodenstein
123 N. Wacker Drive,
Suite 1800
Chicago, IL 60606
E-mail: ibodenstein@cozen.com
Phone: (312) 474-1647
Fax: (312) 980-3888
- Joseph E. Cohen
105 West Madison Street, Suite 1100
Chicago, IL 60602
Phone: (312)368-0300
- Michael K. Desmond
10 South LaSalle St., Suite 3600
Chicago, IL 60603
E-mail: mdesmond@sgrlaw.com
Phone: (312) 264-1007
Fax: (312) 264-2627
- Deborah Ebner
P.O. Box 929
Glenview, IL 60025
E-mail: dkebner@deborahebnerlaw.com
Phone: (312) 922-3838
Fax: (312) 922-8722
- Aja Carr Favors
211 W. Wacker Dr.
3rd Floor - PMB 1718
Chicago, IL 60606
E-mail: trustee@favorslawfirm.com
Phone: (312) 618-4137
- Richard M. Fogel
123 N. Wacker Drive,
Suite 1800
Chicago, IL 60606
E-mail: rfogel@cozen.com
Phone: (312) 474-4452
Fax: (312) 980-3888
- Frances F. Gecker
1327 W. Washington Blvd
Suite 5G-H
Chicago, IL 60607
E-mail: fgecker@fgllp.com
Phone: (312) 276-1400
Fax: (312) 276-0035
- Ilene F. Goldstein
900 Skokie Blvd, Suite 128
Suite 200
Northbrook, IL 60062
Phone: (847) 562-9595
- Karen R. Goodman
135 S. LaSalle Street, Suite 3705
Chicago, IL 60603
E-mail: kgoodman@cranesimon.com
Phone: (312) 641-6777
- William S. Hackney III
150 North Michigan Ave.
Suite 3300
Chicago, IL 60601
E-mail: whackney@salawus.com
Phone: (312) 894-3200
- Brian A. Hart
5702 Elaine Drive, Suite 104
Suite 108
Rockford, IL 61108 -2458
E-mail: brian@rockfordbankruptcy.com
Phone: (815) 965-8635
- Reed Heiligman
53 West. Jackson Blvd.
Suite 701
Chicago, IL 60604
E-mail: reed@hzhlaw.com
Phone: (312) 888-9541
- David R. Herzog
77 West Washington Street
Suite 1717
Chicago, IL 60602
E-mail: drhlaw@mindspring.com
Phone: (312) 977-1600
Fax: (312) 977-9936
- Ariane Holtschlag
105 W Madison, Suite 1500
Chicago, IL 60602
E-mail: aholtschlag@wfactorlaw.com
Phone: (312) 878-4830
- Cindy M. Johnson
140 S. Dearborn Street, Suite #1510
Chicago, IL 60603
E-mail: cjohnson@JNLegal.net
Phone: (312) 345-1306
Fax: (312) 345-1306
- Frank J. Kokoszka
318 West Adams Street
11th Floor
Chicago, IL 60606 -2172
E-mail: fkokoszka@k-jlaw.com
Phone: (312) 429-9600
Fax: (312) 443-5704
- Gina B. Krol
105 W. Madison Street, Suite 1100
Chicago, IL 60602
Phone: (312)368-0300
- David P. Leibowitz
3478 N. Broadway
Apartment 207
Chicago, IL 60657
E-mail: dleibowitz@lakelaw.com
Phone: (847) 249-9100
Fax: (847) 249-9180
- Phillip D. Levey
2722 North Racine Avenue
Chicago, IL 60614
E-mail: levey47@hotmail.com
Phone: (312) 348-9682
Fax: (312) 348-9683
- Philip V. Martino
300 North LaSalle Street
Chicago, IL 60654
E-mail: phillip.martino@quarles.com
Phone: (312) 715-5000
- Richard J. Mason
70 W. Hubbard, St. 304
Suite 4100
Chicago, IL 60654 -4603
E-mail: Richardjmason130@gmail.com
Phone: (847) 962 1381
Fax: (312) 849-3690
- Peter N. Metrou
123 W. Washington St. #216
Oswego, IL 60543
Phone: (630) 551-7171
- Alex D. Moglia
1325 Remington Road, Suite H
Schaumburg, IL 60173
E-mail: amoglia@mogliaadvisors.com
Phone: (847) 884-8282
Fax: (847) 884-1188
- Norman B. Newman
191 North Wacker Drive
Suite 1800
Chicago, IL 60606
E-mail: nnewman@sfgh.com
Phone: (312) 521-2000
Fax: (312) 521-2100
- Joseph D. Olsen
838 N. Main Street
Rockford, IL 61103 -6906
E-mail: Jolsenlaw@comcast.net
Phone: (815) 965-8635
Fax: (815) 965-4573
- Gus A. Paloian
233 S. Wacker Drive
Suite 8000
Chicago, IL 60606 -6448
E-mail: gpaloian@seyfarth.com
Phone: (312) 460-6299
Fax: (312) 460-7000
- Steven R. Radtke
79 W. Monroe St., #1305
Chicago, IL 60603
E-mail: sradtke@chillchillradtke.com
Phone: (312) 346-1935
Fax: (312) 346-2138
- N. Neville Reid
200 West Madison
Suite 3000
Chicago, IL 60606
E-mail: nreid@fhslc.com
Phone: (312) 224-1245
- Thomas E. Springer
400 South County Farm Road
Suite 330
Wheaton, IL 60187
Phone: (630)510-0000
- Catherine L. Steege
353 N. Clark Street
Chicago, IL 60654
E-mail: csteege@jenner.com
Phone: (312) 222-9350
Fax: (312) 923-2929
- Miriam R. Stein
30 South Wacker Drive
Suite 2600
Chicago, IL 60606
E-mail: mstein@chuhak.com
Phone: (312) 855-6109
Fax: (312) 444-9024
- James E. Stevens
6833 Stalter Drive
Rockford, IL 61108
E-mail: JStevens@BSLBV.com
Phone: (815) 962-6611
Fax: (815) 962-0687
- Gregg E. Szilagyi
542 South Dearborn Street
Suite 1400
Chicago, IL 60605 -7
E-mail: gs@tailserv.com
Phone: (312) 663-0801
Fax: (312)634-5520
- Joji Takada
6336 North Cicero Avenue
Suite 201
Chicago, IL 60646
Phone: (773) 790-4888
- Zane L. Zielinski
6336 North Cicero Avenue, Suite 201
Chicago, IL 60646
E-mail: trustee@zanezielinski.com
Phone: (773) 877-3191
Fax: (815) 846-8576
- Richard S. Alsterda
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TRUSTEE(S) COVERING THE SOUTHERN DISTRICT OF ILLINOIS
- Robert E. Eggmann, III
2227 Illinois Route 157
Edwardsville, IL 62025
E-mail: ree@carmodymacdonald.com
Phone: (618) 222-1900
- Dana S. Frazier
818 Locust Street
P.O. Box 159
Murphysboro, IL 62966
Phone: (618) 687-5707
- Donald M. Samson
226 West Main Street, Suite 102
Belleville, IL 62220
Phone: (618)235-2226
- Robert E. Eggmann, III
The content of this article pertains to all US states and counties.