When you file for Chapter 7 bankruptcy, you will be assigned a U.S. Trustee to oversee your case. While this person will mostly remain hands-off during the process, there are certain situations that will prompt the trustee to become more involved in your bankruptcy filing.

If your gross income is above the median income, a trustee will definitely be assigned to your case. Working with bankruptcy analysts, the trustee will use the information from your Form 22A to plug into a spreadsheet. The trustee will then look at the different categories listed to see if any expense challenges can be made. If this cannot be done, then the trustee is then likely to attempt to move your case into a Chapter 13 bankruptcy stage.

Should you list your 401(k) loan in your means test calculations, it is likely to be challenged by the trustee. In most cases, this loan will not be considered a secured debt, therefore not requiring repayment. Since most trustees will consider creditors to be of more importance than your 401(k) repayment, it will be challenged during the initial stages of your Chapter 7 bankruptcy filing.

For additional answers to your bankruptcy questions, contact us to consult with a Houston bankruptcy attorney.