Trustee. In regards to bankruptcy, this title is deceptive. Bankruptcy trustees do not represent debtors' interests. Bankruptcy trustees does not represent debtors. Bankruptcy trustees represent property of the bankruptcy estate, which consists of all property owned by debtors on the date of filing the petition, and can represent all property acquired by debtors within one year of filing bankruptcy.

A description provided by the National Association of Bankruptcy Trustees describes liquidation trustees as … "the Chapter 7 Trustee works primarily for the benefit of the Debtor's unsecured creditors."

In actuality, the chapter 7 trustee represents the interests of the "bankruptcy estate." The bankruptcy estate consists of all property and all interests in property owned by the debtor upon the filing of the bankruptcy. There are also some laws that pertain to property transfers before filing for bankruptcy. Therefore, the chapter 7 trustee represents the interests of property.

Numerous successful attorneys refer to Chapter 7 trustees as "bottom-feeders." Although statute allows for accountants and others to be appointed to the panel of Chapter 7 trustees, most trustees are licensed attorneys.

As a panel trustee, their part-time job is to preside at the 341(a) Meeting of Creditors. For doing so, they receive $60 per case for those cases that do not involve assets. The source of the $60 is from the debtor's filing fee. If a Chapter 7 Trustee presides at ten 341(a) Meetings a week, they earn $600. However, if those cases do not involve assets, the trustee does not receive the $60 compensation. Generally, the Chapter 7 Trustee files a motion to hire an attorney for trustee. The attorney hired is the trustee who has a license to practice law, or the trustee's law firm, or another law firm that employees, or has as a partner who is an attorney and also on the panel of trustees.

In few Chapter 7 asset cases, the Trustee does not hire an attorney for trustee. These are generally cases involving the sale of property when there is no dispute as to ownership or exemptions. However, some Chapter 7 Trustees still hire an attorney for trustee to preside over closings.

In addition to being referred to as "bottom-feeders," Chapter 7 trustees are also referred to as "used property salespeople." That's because Chapter 7 trustees work for incentive commission, which we commonly refer to as recovery commission. If the trustee can sell your great grandmother's wedding band that you inherited, he will. If he sells it for $500.00, he automatically receives $125.00 commission for doing so, plus expenses.

Secured Creditors are those, for example, that you pay your mortgage and car payment to. A common way of determining a secured creditor from an unsecured creditor is if you purchased something and owe on it, and it can be foreclosed, repossessed or has a lien on it. If you have equity in that property, the trustee will sell it. The Creditor is secured in the sense that they will get the money owed to them 100%. At least, that is what bankruptcy law has provided. It is not evidenced in at least three Chapter 7 cases filed in the Northern District of Illinois, Western Division.

Case numbers 98-54233, 97-50687 and 99-50046 are three such cases. The same Chapter 7 trustee is appointed to all three cases. He got away with it in case number 97-50687, and that set a pattern for him to continue. However, according to bankruptcy law, secured creditors are to be paid 100% of what is due and owing to them. Secured creditors have the option of foreclosing or repossessing the property.

Unsecured Creditors in Chapter 7 cases are not as fortunate as secured Creditors. That's because unsecured Creditors get what is left of assets after the trustee's incentive commission, compensation, expenses, and pay-off of secured claims. In some cases, unsecured creditors receive nothing.

A reliable source reported that Assistant U.S. Trustee , Dean Havalis, stated that Chapter 7 bankruptcy trustees are not federal employees. On the web site for the U.S. Trustee Program, on the list of Chapter 7 trustees, they have placed the statement:

At the Meeting of Creditors, which every Debtor filing Chapter 7 has to attend, the trustee assigned that day swears them in. Therefore, people are being sworn in by a private party who is not a government employee.

At the Meeting of Creditors, the trustee assigned that day asks questions pertaining to the information on the bankruptcy forms, including assets and debts. Therefore, private citizens are sharing personal information with a "PRIVATE PARTY."

The forms filed as part of the bankruptcy petition includes information pertaining to employment, income, and dependents. Therefore, this personal information is made available to a "PRIVATE PARTY."

The same is true for when Chapter 7 trustees send letters to debtors and/or their attorneys. They represent themselves as the U.S. Trustee. U.S. Trustees are federal appointed government employees. Chapter 7 trustees are appointed by U.S. Trustees but paid from filing fees and on commission -- not from the government's payroll.

So, what gives PRIVATE PARTIES authority to place people under oath, examine citizens, have information available to them pertaining to employment and dependents, and to send letters threatening fines and imprisonment? Federal law, more commonly referred to as the U.S. Code. Therefore, the U.S. Code gives federal authority to private parties that are not government employees AND PAYS THEM FOR IT from filing fees and assets of bankruptcy estates.

11 USC Sec. 704 is titled, "Duties of trustee. " The subchapter is titled, "OFFICERS AND ADMINISTRATION." Automatically, the U.S. Code, in describing the duties of trustees, recognizes trustees as "officers." The first six duties are described as

(1) collect and reduce to money the property of the estate for which such trustee serves, and close such estate as expeditiously as is compatible with the best interests of parties in interest;

These are the duties of a Chapter 7 bankruptcy trustee. The person performing these duties is identified in the title of this statute as an "officer." The Executive Office for U.S. Trustees says otherwise.

Nolo describes an Independent contractor as "a term used to describe people who are in business for themselves." That fits the description of Chapter 7 trustees who are in the business for incentive commission. However, other than this, Chapter 7 trustees fail the duck test. To find the most reliable duck test, we looked at how the IRS determines if a worker is an independent contractor or an employee. The IRS uses the common law "right of control" test to determine worker status. Under this test, workers are employees if the people they work for have the right to direct and control the way they work -- including the final results and the details of when, where and how the job is accomplished.

The U.S. Code details the duties of trustees. Under the structure of the United States Trustee Program, Chapter 7 trustees work under the supervision of Regional U.S. Trustees, who work under the supervision of the Director for the Executive Office for U.S. Trustees. Therefore, according to the "right of control" test of the IRS, Chapter 7 trustees are employees of the federal government.

Passed. U.S. Trustees hold seminars, workshops, and provides literature to train Chapter 7 trustees. U.S. Trustees also provide handbooks of instructions for Chapter 7 trustees. In addition, let's not forget that the U.S. Code itself provides the job description.

Therefore, according to an agency of the federal government, the IRS, Chapter 7 trustees ARE EMPLOYEES of the federal government. The authority they have is authority given to them by the federal government. The U.S. Code calls them "officers."

When Wells of Justice refers to Chapter 7 trustees as "officers and employees of the United States government," we are using the title as provided by the U.S. Code, and not the title provided by the Executive Office for U.S. Trustees. Should we follow what the law says, although the Executive Office for U.S. Trustees does not?

When the U.S. Trustee describes Chapter 7 trustees as "private parties and not government employees," it carries a motive of legal jargon to avoid accountability for investigating and prosecuting those Chapter 7 trustees that commit crimes under color of official right.

When a Chapter 7 trustee writes a Debtor or non-Debtor demanding money, they are doing so under the color of official right and not as a private party. When a Chapter 7 trustee files suit against a party demanding turnover of property or money, they do not state in their Adversary complaints that they are a private party representing the interests of the bankruptcy estate. They state that they are the attorney for the U.S. Trustee, or trustee of the bankruptcy estate. Chapter 7 trustees do not represent the interests of bankruptcy estates as private parties -- or do they?

Most recently, some in the U.S. Trustee's office and the F.B.I. recommended that victims file civil lawsuits against the Chapter 7 trustees committing fraud, extortion and embezzlement under color and claim of official right. This eliminates all and any responsibility for these federal agencies to investigate the crimes. Their play on words defining Chapter 7 trustees helps the government avoid embarrassment and accountability to recognize and investigate corruption of their own used-property salespeople. They prefer having private citizens hire private attorneys to bring "private parties" to justice. It appears as though the U.S. Department of Justice, the Regional office of the U.S. Trustee, and offices of the F.B.I., think that victims are only seeking money and by recommending filing civil lawsuits against Chapter 7 trustees, money will bring forth justice.

Those citizens seeking redress from the courts by filing suits against Chapter 7 trustees find that the courts either do not understand the structure of the U.S. Trustee Program, or intentionally make law as necessary to avoid hearing suits.

There are court decisions where federal judges declare that Chapter 7 trustees are "appointed by the bankruptcy court," and therefore, privileged to judicial immunity. U.S. Trustees appoint panel trustees to Chapter 7 cases. One of the purposes of the U.S. Trustee Program was to separate judicial and administrative functions. Chapter 7 Trustees "administer" bankruptcy estates. Their function is administrative.

There are other court decisions where federal judges declare that Chapter 7 trustees can be sued, but only if they abused their authority. As long as bankruptcy judges enter orders giving color of official right to abuse, private citizens have no form of redress.

Some Chapter 7 trustees commit fraud, extortion, and embezzlement under color of official right of the United States government. The trauma caused to victims … the financial harm caused to non-Debtors … the vindictive acts used by the trustees when their victims resist extortion and bribe demands … the misuse and abuse of the law … DEMANDS THAT JUSTICE IS SERVED.

The recommendation of personnel with the Executive Office for U.S. Trustees that victims obtain legal counsel to pursue civil options against Chapter 7 trustees is betrayal of trust. It is deceptive practice. It is an intentional financial raping of victims to financially support the judicial system and legal community by paying filing and legal fees for cases that are dismissed by judges granting Chapter 7 trustees -- private parties when performing duties of trustee -- judicial immunity. It causes further harm upon victims by giving them false hope.

The Chapter 7 trustees that commit criminal acts should and must be investigated, prosecuted, and punished more harshly than regular John Does, because the United States government gives these criminals the opportunity, authority, and avenue that makes these crimes possible "under color and claim of official right."