Working With the Bankruptcy Trustee

 

Filing for Chapter 7 bankruptcy means that you'll be dealing with a "bankruptcy trustee" who will be assigned to handle your case. The trustee's job is to gather all non-exempt property you own into the "bankruptcy estate" to determine what (if anything) can be sold and the proceeds distributed to your unsecured creditors. In most cases, there's nothing left — "no-asset" cases make up more than 90% of consumer chapter 7 cases — but the trustee will be looking.

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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 toreduce 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 Michigan Eastern 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 Michigan from the US Department of Justice.

Once you bring up this list, find the Michigan trustees for the Michigan Eastern District Bankruptcy Court.

MICHIGAN

 

Note: The individuals listed are private parties, not government employees.

 

 

TRUSTEE(S) COVERING THE EASTERN DISTRICT OF MICHIGAN

 

Collene K. Corcoran
P.O. Box 535
Oxford, MI 48371
E-mail: trusteecorcoran@gmail.com
Phone: (248)969-9300

 

Douglas S. Ellmann
2075 W. Stadium Blvd. #1088
Ann Arbor, MI 48106
E-mail: dse@ellmannlaw.com
Phone: (734) 668-4800
Fax: (734)662-3893

 

Karen E. Evangelista
410 W. University Drive., Suite 225
Rochester, MI 48307
E-mail: kevangelistalaw@gmail.com
Phone: (248) 652-7992
Fax: (248)276-1214

 

Randall L. Frank
1298 W. Sugnet
Midland, MI 48640

P.O. Box 2220
Bay City, MI 48707 -2220
E-mail: randallfrank@randallfrank.com
Phone: (989)893-2461
Fax: (989)893-9331

 

Stuart A. Gold
24901 Northwestern Highway, Suite 444
Southfield, MI 48075
E-mail: agold@glmpc.com
Phone: (248)350-8220
Fax: (248)350-0519

 

Daniel C. Himmelspach
P. O. Box 5856
Saginaw, MI 48603
E-mail: danhimmelspach@gmail.com
Phone: (989) 790-0400
Fax: (989) 401-9575

 

Wendy T. Lewis
444 West Willis Street, Suite 101
Detroit, MI 48201
E-mail: brandy@lewistrustee.com
Phone: (313) 832-5555
Fax: (313) 832-5566

 

Kyung-Jin Lim
176 South Harvey, Suite 1
Plymouth, MI 48170
E-mail: kjinlim7@gmail.com
Phone: (734)416-9420
Fax: (734)416-9423

 

Homer W. McClarty
19785 West Twelve Mile
#331
Southfield, MI 48076
E-mail: hwmcclarty@aol.com
Phone: (248)352-7686
Fax: (248)352-7734

 

Timothy J. Miller
64541 Van Dyke
Suite 101-B
Washington, MI 48095
E-mail: tjmillerplc@gmail.com
Phone: (586) 281-3764

 

Kenneth Andrew Nathan
32300 Northwestern Hwy
Suite 200
Farmington Hills, MI 48334
E-mail: ken@nathanlawplc.com
Phone: (248) 663-5133

 

Mark H. Shapiro
25925 Telegraph Road
Suite 203
Southfield, MI 48033
E-mail: shapiro@steinbergshapiro.com
Phone: (248)352-4700
Fax: (248)352-4488

 

Basil T. Simon
645 Griswold
Suite 3466
Detroit, MI 48226
E-mail: bsimon@sszpc.com
Phone: (313)962-6400
Fax: (313)963-4614

 

Michael A. Stevenson
26100 American Drive
Suite 500
Southfield, MI 48034
E-mail: mstevenson@sbplclaw.com
Phone: (248) 354-7906
Fax: (248)423-8201

 

Samuel D. Sweet
52 E. Burdick St. #10
Oxford, MI 48371
E-mail: trusteesweet@hotmail.com
Phone: (248)236-0985
Fax: (248)236-0984

TRUSTEE(S) COVERING THE WESTERN DISTRICT OF MICHIGAN

 

Thomas Allen Bruinsma
6812 Old 28th Street, Suite E
Grand Rapids, MI 49546
Phone: (616)975-2010

 

Scott A. Chernich
313 S. Washington Sguare
Lansing, MI 48933
Phone: (517)371-8100
Fax: (517)371-8200

 

Darrell R. Dettmann
1207 Gray Street
Marquette, MI 49855
Phone: (906) 235-7739
Fax: (906) 228-7357

 

Laura J. Genovich
1700 E. Beltline Avenue, NE Suite 200
Grand Rapids, MI 49525 -7044
Phone: (616) 726-2280
Fax: (616) 726-6813

 

Lisa E. Gocha
P. O. Box 398
Hudsonville, MI 49426
E-mail: lgchapter7@yahoo.com
Phone: (616) 797-4206
Fax: (616)662-4148

 

Kelly M. Hagan
P.O. Box 6844
Traverse City, MI 49696
E-mail: Kelly@HaganLawOffices.com
Phone: (231)938-7095
Fax: (231)938-7995

 

Stephen L. Langeland
6146 W. Main, Suite C
Kalamazoo, MI 49009
E-mail: slangeland@slangelandlaw.com
Phone: (269)382-3703

 

Marcia R. Meoli
17 West 10th Street, Suite 120
Holland, MI 49423
E-mail: mmeoli@meolilaw.com
Phone: (616) 396-2124

 

Jeffrey A. Moyer
2757 44th Street, SW
Suite 304BB
Wyoming, MI 49509

P.O. Box 337
Grandville, MI 49468 -0337
Phone: (616) 532-4002

 

Thomas C. Richardson
P.O. Box 51067
Kalamazoo, MI 49005 -1067
E-mail: thomasrichardson2@earthlink.net
Phone: (269) 349-7415

 

Thomas R. Tibble
2813 West Main Street
Kalamazoo, MI 49006
E-mail: trustee@trusteeresourcegroup.com
Phone: (269) 342-9482

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Jurisdictional relevance: US

Legal Consumer - Lenawee County, MILaw. The content of this article pertains to all US states and counties.