What can I do if Trustee has taken over case in bankruptcy? 8 Answers as of December 05, 2012I recently had to file bankruptcy after the school district where I had been working put me on unpaid leave rather than provide accommodations for my disability, which was unquestioned, or release me from my contract so I could draw unemployment. My union attempted to mediate the situation for more than a year and finally filed a complaint with the EEOC. The union wouldn't respond to my questions about the bankruptcy and only mentioned after the fact that the bankruptcy trustee would now be the plaintiff in the case once it was filed. The attorneys then dropped my case after two years "due to the bankruptcy filing" and their statement that they would now only be working for my creditors. Does the trustee only pursue the creditor's debt or is there an obligation that they also pursue my claims? I am considering converting to a chapter 13 to avoid all of this mess.
Gonzalez & Tybor, P.A. | Gabriel Gonzalez
Any lawsuit you are involved in, presents a situation where you have an expectation of income. The money or award you MIGHT receive from a lawsuit represents an asset of yours. And, as you seem to know, there are limits to how much of your assets can be protected in a Chapter 7, Converting to a Chapter 13 won't necessarily mean that your creditors will receive any less than if you stayed in a Chapter 7.
Answer Applies to: Florida
Tom Scott & Associates | John Hauber
The filing of a bankruptcy creates an estate pursuant to Section 541 of the Bankruptcy Code and all assets that you own (or have an equitable interest in) become property of the bankruptcy estate. The Chapter 7 trustee has a duty to administer the assets of the estate and make an equitable distribution to your unsecured creditors. It is true that the Chapter 7 trustee only has a duty toward the estate creditors (and not you at all). However, your testimony may be necessary in any trial in order for the trustee to collect anything at all. In converse, if you do not testify at a deposition or at a trial, there may be little likelihood that the estate will prevail (yes, the trustee is substituted as the plaintiff). Therefore, you may wish to discuss this matter in detail with the estate attorney and make
Answer Applies to: Indiana
Dan Wilson Bankruptcy | Dan Wilson
You have a complicated situation. By any chance, did you file pro se? Your possible settlement or award in your lawsuit was an asset when you filed your Ch. 7 case. It is a non-exempt asset. That means it is subject to seizure by the Ch. 7 trustee. The Ch 7 trustee can step into your shoes and prosecute the case. I have had trustees threaten to do this in my cases. They ultimately did not because they were personal injury suits, proceeds of which are exempt from seizure. Ch. 13 may help you, but you MUST have competent legal representation.
Answer Applies to: Colorado
Moffa & Bonacquisti, P.A. | John A. Moffa
Chapter 7 Trustees are given wide latitude to settle cases, such as yours. Depending on the issues in the case, you COULD be entitled to exempt a portion of the settlement/lawsuit. Converting to Chapter 13 might give you more free reign in settling the case, but most Chapter 13 Trustees require that you pay all of your creditors in full UNLESS some of the proceeds are exempt. The issues here can be complicated. If you don't have an attorney, consult with someone who has a lot of experience in representing Debtors OR representing Chapter 7 Trustees. If you already have an attorney, consult with her/him to determine what rights you might have to claim a portion of the lawsuit proceeds as exempt or what might be in your best interest.
Answer Applies to: Florida