CHAPTER 7 BANKRUPTCIES
The following are frequently asked questions regarding Chapter 7 Bankruptcies and general responses.
1. What is a Chapter 7 Bankruptcy?
A Chapter 7 Bankruptcy covers liquidation for individual and business debtors. Once a debtor files under Chapter 7, a trustee is appointed to take over the debtor's property. Any property of value is subject to sale or liquidation for the benefit of creditors. A debtor may be able to keep some personal items and claim certain exemptions.
Once an individual files for Chapter 7, a "Notice of Chapter 7 Bankruptcy Case, Meeting of Creditors, & Deadlines" will be generated by the court. This notice provides information such as the name of the debtor, the debtor's attorney, the case number, the trustee appointed, the filing date, the date, time, and place of the Meeting of Creditors (341 meeting), the deadline for creditors to file a proof of claim, and the deadlines to file objections.
2. Who is Kenneth Kirschenbaum?
Kenneth Kirschenbaum, serves as a bankruptcy trustee for the United States Bankruptcy Court, Eastern District of New York since 1976. Kenneth Kirschenbaum is currently serving on the United States Trustee's Panel of Chapter 7 trustees. Mr. Kirschenbaum is also a former standing Chapter 13 Trustee for the Eastern District.
3. How is a trustee selected?
To be selected as a trustee, an individual must meet certain qualifications as established in 28 C.F.R.§ 58.3(b). The panel member must:
1. possess integrity and good moral character.
2. be physically and mentally able to satisfactorily perform a trustee's duties.
3. be courteous and accessible to all parties with reasonable inquiries or comments about a case for which such individual is serving as private trustee.
4. be free of prejudices against an individual, entity, or group of individuals or entities which would interfere with unbiased performance of a trustee's duties. 5. not be related by affinity or consanguinity within the degree of first cousin to any employee of the Executive Office for United States Trustees of the Department of Justice, or to any employee of the Office of the United States Trustee for the district in which he or she is applying.6. be either:
a. a member in good standing of the bar of the highest court of a state or of the District of Columbia;
b. a certified public accountant;
c. a college graduate with a bachelor's degree from a full four-year course of study (or the equivalent) of an accredited college or university, (accredited as described in Part II, § III of Handbook XI 18 promulgated by the U.S. Office of Personnel Management) with a major in a business-related field of study or at least 20 semester-hours of business-related courses; or hold a master's or doctoral degree in a business-related field of study from a college or university of the type described above;
d. a senior law student or candidate for a master's degree in business administration recommended by the relevant law school or business school dean and working under the direct supervision of-
(1) a member of a law school faculty;
(2) a member of the panel of private trustees;
(3) a member of a program established by the local bar association to provide clinical experience to students; or
e. have equivalent experience as deemed acceptable by the United States Trustee.
7. be willing to provide reports as required by the United States Trustee.
4. What are a trustee's duties?
Among the items described in section 704 of The US Bankruptcy Code, the trustee shall: collect and reduce to money the property of a debtor's estate, investigate the financial affairs of the debtor, and close an estate as expeditiously as is compatible with the best interests of the parties.
5. What are a Debtor's Duties?
Among the items described in section 521 of The US Bankruptcy Code, the debtor shall: file a list of creditors, a schedule of assets and liabilities, a schedule of current income and current expenditures, and a statement of the debtor's financial affairs. Additionally, the debtor shall surrender all property of the estate to the trustee, and cooperate with the trustee as necessary to enable the trustee to perform the trustee's duties.
6. What is a discharge?
Generally, a discharge is an order granted by the court which eliminates certain debts incurred before the date of the debtor's filing. Some debts, however, are not dischargable. Examples of some non-dischargable debts under Chapter 7 include: most taxes; child support; alimony and maintenance; most student loans; and debts for most fines, penalties, forfeitures, or criminal restitution obligations.
7. When will a trustee object to discharge?
The trustee may oppose to a debtor's discharge under certain circumstances. For example, if it is discovered that dishonest activity occurred in connection with the bankruptcy, the trustee may submit an objection to the debtor's discharge.
The following are some general grounds as described in section 727 of the The US Bankruptcy Code for an objection to discharge: if the debtor acts with intention to hinder, delay, or defraud a creditor by: removing, destroying, mutilating or concealing property; if the debtor fraudulently conveys property; if the debtor unjustifiably conceals, destroys, mutilates, falsifies, or fails to keep any recorded information in regard to the debtor's financial condition, if the debtor knowingly and fraudulently makes a false oath or account, or if the debtor disobeys a court order.
Additionally, The US Bankruptcy Code under section 707(b) permits a trustee to make a motion to dismiss a case where an individual has debts which are "primarily consumer debts if (it) finds that the granting of relief would be a substantial abuse of the provisions of (this) chapter."
8. Directions to 341 Meetings:
Directions to the Central Islip Meeting
Long Island Federal Courthouse: 290 Federal Plaza, Central Islip, New York 11722
If coming from the west, take Southern State Parkway to Exit 43A. Please follow signs to the Court and into the parking lot. If coming from the north, take Route 111 which merges with Carleton Avenue. The new Courthouse is on the left, approximately 2 and 1/2 miles south of the Long Island Rail Road tracks in Central Islip.
If using the Long Island Rail Road, the stop is the Central Islip location, but you will need taxi accommodations to go the 2 and 1/2 miles south for the Court site.
APPOINTMENT TO THE PANEL OF TRUSTEES
The United States Trustee establishes a panel of qualified individuals to be appointed to cases on a fair and equitable basis.
The United States Trustee maintains and conducts an open system for the recruitment of persons interested in serving on the panel of private trustees. The United States Trustee may not discriminate on the basis of race, color, religion, sex, national origin, or age in appointments to the panel, and, in this regard, must assure equal opportunity for all appointees and applicants. 28 C.F.R. § 58.5.
Each United States Trustee is authorized to increase or decrease the total membership of the panel. In addition, each United States Trustee is authorized to institute a system of rotation of membership or the like to achieve diversity of experience, geographical distribution or other characteristics among the persons on the panel. 28 C.F.R. § 58. 1. The number of individuals on the panel is governed by the need to ensure the prompt, competent, and complete administration of cases, as well as by the need for fair distribution of case assignments.
A. ELIGIBILITY A. ELIGIBILITY
To be eligible for membership on a panel, a person must possess all of the qualifications established by the Attorney General of the United States under 28 U.S.C. § 586(d) and published in the Code of Federal Regulations at 28 C.F.R. § 58.3.
The trustee must successfully undergo initial and five-year background checks which include name and fingerprint checks, a tax check with the Internal Revenue Service, and a report on credit history (with disclosure authorization), including any subsequent credit reports requested by the United States Trustee. The trustee's appointment to the panel or the assignment of cases may be terminated based on unresolved problems discovered during background checks.
B. QUALIFICATIONS B. QUALIFICATIONS
The qualifications for membership on the panel are set forth in 28 C.F.R.§ 58.3(b). The panel member must:
1. possess integrity and good moral character.
2. be physically and mentally able to satisfactorily perform a trustee's duties.
3. be courteous and accessible to all parties with reasonable inquiries or comments about a case for which such individual is serving as private trustee.
4. be free of prejudices against an individual, entity, or group of individuals or entities which would interfere with unbiased performance of a trustee's duties. 5. not be related by affinity or consanguinity within the degree of first cousin to any employee of the Executive Office for United States Trustees of the Department of Justice, or to any employee of the Office of the United States Trustee for the district in which he or she is applying.6. be either:
a. a member in good standing of the bar of the highest court of a state or of the District of Columbia;
b. a certified public accountant;
c. a college graduate with a bachelor's degree from a full four-year course of study (or the equivalent) of an accredited college or university, (accredited as described in Part II, § III of Handbook XI 18 promulgated by the U.S. Office of Personnel Management) with a major in a business-related field of study or at least 20 semester-hours of business-related courses; or hold a master's or doctoral degree in a business-related field of study from a college or university of the type described above;
d. a senior law student or candidate for a master's degree in business administration recommended by the relevant law school or business school dean and working under the direct supervision of-
(1) a member of a law school faculty;
(2) a member of the panel of private trustees;
(3) a member of a program established by the local bar association to provide clinical experience to students; or
e. have equivalent experience as deemed acceptable by the United States Trustee.
7. be willing to provide reports as required by the United States Trustee.
8. have submitted an application under oath, in the form prescribed by the Director, to the United States Trustee for the district in which appointment is sought: Provided, that this provision may be waived by the United States Trustee on approval of the Director.
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