a) Debtor – Obviously, the debtor is the person, or married couple, filing bankruptcy. Additionally, a corporation can be a Chapter 7 debtor, although filing a corporate Chapter 7 bankruptcy does not usually make sense. It is quite common for a person’s insolvency to be primarily the result of their failed corporation. Usually, the owner is a sole shareholder of the corporation and has personally guaranteed the corporate debt. The shareholder may be forced to file for bankruptcy protection, but typically the corporation just “dies” after the assets are liquidated.
b) Creditor – The creditor is the entity to whom the debtor owes money. There are different “classes” of creditors, such as priority, secured and unsecured. We order a tri-merged credit report for every bankruptcy client to help ensure that all creditors are accurately reported in the bankruptcy schedules, but not all creditors necessarily appear on the credit report. Ultimately, the debtor must analyze his schedules to verify that every creditor has been listed.
c) U.S. Trustee – Under BAPCPA, the U.S. Trustee’s Office, a branch of the U.S. Department of Justice, plays a greater role in the process of reviewing debtor’s schedules. The U.S.T. oversees much of the” busy work” required by the new law, such as approving the companies that offer irrelevant-but-mandatory credit counseling and debtor education. The U.S.T. also reviews the arbitrary “means test” that every Chapter 7 debtor must file. The U.S.T. is not a bad agency, but Congress has drawn its attention away from its responsibility of policing real abuse within the bankruptcy system. Quite frankly, more damage is done to the bankruptcy process by incompetent bankruptcy petition preparers, and the U.S. Trustee would better serve the citizenry by monitoring the unauthorized practice of law by these unlicensed services.
d) Local Trustee – The local Trustees are individuals supervised by the U.S. Trustee’s office. However the motivation and focus of a Chapter 7 Trustee is different than the Chapter 13 Trustee.
(1) Chapter 7 Trustee – There are eight Chapter 7 Trustees in the Jacksonville Division, and one is appointed to each Chapter 7 bankruptcy on a rotating basis. The purpose of this trustee is to get money for the debtor’s general unsecured creditors. Because the trustee earns a commission on whatever he can collect for these creditors, his focus is primarily on the debtor’s non-exempt assets. In reality, the trustee cares very little about a debtor’s disposable income.
(2) Chapter 13 Trustee – There is only one Chapter 13 trustee in the Jacksonville Division, Doug Neway. Like the Chapter 7 Trustee, Doug Neway is also concerned with protecting the rights of creditors, but in the context of Chapter 13, where creditors are paid pursuant to a Plan over the course of 36 to 60 months, it is Doug Neway's goal to maximize the monthly plan payments made by the debtor. His office receives 5% of every monthly plan payment as an administrative expense.
e) Judge – There are two bankruptcy judges in the Jacksonville Division: The Honorable Paul Glenn and The Honorable Jerry Funk. Most debtors will never see the judge assigned to their case. No Chapter 7 debtors see their judge unless things are not going well for them. All of Judge Glenn’s Chapter 13 debtors will have to attend their confirmation hearing, and some of Judge Funk’s Chapter 13 debtors will have to attend their confirmation hearing. If you are lucky enough to attend a hearing before either judge, dress appropriately! A man should wear a coat and tie unless he does not own a coat and tie. Otherwise, he should wear the best clothing he owns. A woman should wear a dress or suit.