Bankruptcy

When Trustees Attack!

By Joseph McDaniel, Esq.

One is the occasional bankruptcy trustee manifesting extreme rudeness, prejudice, or ignorance.

I've seen it about a dozen times.

Since I've worked on thousands of cases, that's a pretty good percentage; that is, I've worked on thousands of cases where trustees DID NOT demonstrate anything nasty.

But think about being a trustee: you get the privilege of telling people that they're going to lose a car, a tax refund, or a house, when the tears are running down their faces.

That's gotta be tough. And they almost always do it with compassion and sensitivity, which they don't have to do.

Now, trustees are always overworked.

This is, after all, a depression.

So some trustees sometimes (and others, always) use threats to get debtor compliance.

That is, they start their first meeting by trying to scare the already terrified debtor into apoplexy. They thunder that if the schedules have omitted an asset, this is the time to come clean! And they use the word perjury as a noun, verb, and another noun. And talk about jail time.

In those first meetings, debtors really ought to come prepared with Adult Diapers.

Others don't do the thundering, but use threats to ask for documents: "and if I don't get those within twenty days, I'm going to file to dismiss your case!"

Now, there's an easy response to all the above.

"The debtor will have those documents to you by the date you've requested."

If they're not available from the bank for a month, of course, the trustee has to get a nice explanatory letter prior to the lapse of his drop dead date, just because.

But whether you get Santa Claus as a trustee, or a close relative of Scrooge, don't take it personally. The poor trustee has to process a zillion cases, and has time pressures imposed by Washington, and a trustee is a fiduciary, so it is a job that has a lot of pressure.

It's not personal; it's only business.

And if you give the trustee the documents she needs to administer the case, that case will work its way through and a good time will be had by all.

Generally, if the case is prepared with care, there aren't a lot of speed bumps or disasters.

And sometimes something blows up (it's better when all the assets and creditors are listed. Really.)

In cases where something blows up, it becomes a matter of damage control, and that normally works pretty well.

And if not, then there's more damage control.

Remember, even when you have your appendix out, there's a small risk of an infection. But then the doc does damage control. It may require further surgery to clean out the wound. It will certain require antibiotics, and may require intravenous antibiotics.

But you don't ever want to give up, because then the results are bad.

NOTHING HERE CONSTITUTES LEGAL ADVICE RE A CHAPTER 7, CHAPTER 13, CHAPTER 11, OR CHAPTER 12. FIND AN ARIZONA BANKRUPTCY LAWYER WHO IS BOARD CERTIFIED IN BANKRUPTCY LAW, AV RATED, AVVO 10 RATED, ON SUPERLAWYERS, OR JUST VERY EXPERIENCED AND A FORMER CHAIR OF SOME BANKRUPTCY SECTION OR COMMITTEE. NOTHING HERE MAY BE USED AS LEGAL ADVICE IN CONNECTION WITH ANY BANKRUPTCY, WHETHER THAT BANKRUPTCY IS IN PHOENIX, GLENDALE, TEMPE, MESA, SCOTTSDALE, OR ANYWHERE ELSE.

Full post as published by Arizona Bankruptcy Attorney Blog on January 08, 2010 (boomark / email).