What is the difference between a debtor in possession and a trustee in Chapter 13 Bankruptcy?
In Chapter 13 bankruptcy law in Washington, the debtor in possession (DIP) and the trustee have different roles. A debtor in possession is the individual filing for bankruptcy. The DIP remains in control of the debtor’s financial affairs, which include managing their assets, income, and expenses. The DIP is also responsible for submitting their debt repayment plan to the court for approval. The trustee is an officer of the court who oversees the bankruptcy proceedings. Specifically, the trustee reviews the debt repayment plan proposed by the DIP and investigates their financial affairs to ensure it is workable. They also call creditors to the meeting of creditors to address any issues with the debt repayment plan. Additionally, the trustee is responsible for making sure all creditors receive payments in accordance with the approved repayment plan. The DIP and the trustee have different but important roles in Chapter 13 bankruptcy law in Washington. The DIP is in charge of proposing a repayment plan to the court and managing their financial affairs while the trustee is responsible for overseeing the proceedings and making sure everyone involved is treated fairly.
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