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Trustee in Bankruptcy


Party appointed by the U.S Trustee to represent a debtor in a bankruptcy case. While the judge has the final discretion to allocate assets, the trustee evaluates the specifics of the case and makes a preliminary recommendation based on their findings.


The role of the bankruptcy trustee is to review bankruptcy appeals and to validate calculations using financial documents.

When someone files for bankruptcy, their property legally becomes a bankruptcy estate. The bankruptcy estate then becomes its own legal entity. This is where a bankruptcy trustee comes in to supervise the bankruptcy estate and to execute required responsibilities by the law such as evaluating and selling properties. Trustees are appointed by the government to ensure the bankruptcy is under proper oversight.

Whether the trustee is handling a Chapter 7 or 13 bankruptcy, their duties essentially remain the same. In a Chapter 7 liquidation bankruptcy the trustee is in charge of:

Locating and evaluating each property

Selling the bankruptcy party’s property

Minimizing claims to creditors

Negotiating terms with existing creditors

Paying proper creditor

In a Chapter 13 reorganization bankruptcy, the bankruptcy party retains possessions of their property throughout the period of the bankruptcy. The trustee oversees more payment responsibilities:

Reviewing bankruptcy party’s repayment plan

Raising objection to the plan as needed

Collecting payments from the bankruptcy’s party to the repayment plan

Allocating payments to creditors

Regardless of the type of bankruptcy, the trustee in a bankruptcy plays a fundamental role during a bankruptcy. Duties differ from case to case, but remain essentially the same. The trustee charges a small fee for reviewing paperwork. The trustee also receives a percentage of assets sold, if any. Trustee’s can or cannot be of extra help to you depending on the individual trustee. Some will go above and beyond to help answer questions, and others won’t.