The gentleman smiling on the left and shaking the hand of the former attorney general is Peter Anderson. He is presently the U.S. Trustee for the Central District of California, the federal courts where we practice. It is a department of the Department of Justice, a division of the executive branch of the federal government. (Note: The Bankruptcy Court is part of the judicial branch of the federal government.)
He has an office at all the major courts in the Central District, in downtown Los Angeles, Santa Ana, CA, Riverside CA and Woodland Hills, CA. Those offices have both attorneys and analysts who are charged with upholding the integrity of the bankruptcy system in our district.
In consumer cases the UST is charged with ferreting out and bringing to the Court’s attention any cases of “abuse.” Abuse simply means misuse. If the UST believes the Means Test was not properly prepared by the Debtor then they will file with the Court a Motion to Dismiss based upon the presumption of abuse that occurs if you do pass the Means Test. The Means Test is a test to see if you are presumed to make too much money to file Chapter 7. They also can file a Motion to Dismiss based upon the “totality of the circumstances” even if you passed the Means Test.
This means that while there is no presumption of abuse, if the UST can prove that a debtor has the ability to repay a significant amount of debt then the case can be dismissed if the debtor does not voluntarily convert the case to a reorganization chapter. The UST is a watchdog organization, and the power to dismiss if there is no conversion to a Chapter 13 (or in rare cases, a Chapter 11) lies with the Bankruptcy Court.
They also appoint the Chapter 7 Trustees and manage their workflow along with the Court.
