{"id":286974,"date":"2016-04-04T10:41:54","date_gmt":"2016-04-04T15:41:54","guid":{"rendered":"https:\/\/ability-fl-prod.internetbrands.com\/ability-law\/bankruptcy\/what-is-bankruptcy\/what-is-a-trustee-in-bankruptcy.html"},"modified":"2026-07-27T11:41:27","modified_gmt":"2026-07-27T16:41:27","slug":"what-is-a-trustee-in-bankruptcy","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/bankruptcy\/what-is-bankruptcy\/what-is-a-trustee-in-bankruptcy.html","title":{"rendered":"What Is a Trustee in Bankruptcy?"},"content":{"rendered":"\n
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What Is a Trustee in Bankruptcy?<\/h1>\n\n
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\n By Christie Nicholson, J.D.<\/a> | Legally reviewed by Catherine Hodder, Esq.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

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Key Takeaways<\/h2>\n

A bankruptcy trustee is an individual the Bankruptcy Court appoints to manage a debtor’s assets and act as an intermediary between debtors, creditors, and the bankruptcy court. A trustee\u2019s primary responsibilities include collecting and distributing payments, monitoring the debtor’s financial activities, and ensuring compliance with bankruptcy regulations.<\/p>\n\n <\/div>\n <\/div>\n<\/div>\n\n\n

According to the U.S. Trustee Program<\/span>,\u200b bankruptcy trustees<\/span> have various obligations and powers. These powers and responsibilities vary depending on the type of <\/span>bankruptcy<\/span> case<\/span>. Trustees work with both debtors and creditors to ensure that the bankruptcy process<\/span> goes smoothly.<\/p>\n

This article explains what a trustee in bankruptcy does, including practical responsibilities. It also discusses how you’ll interact with your trustee if you do move forward with a bankruptcy filing<\/span><\/u><\/a>.<\/p>\n

Whether you\u2019re just thinking about filing bankruptcy or have already started working on your bankruptcy petition, it\u2019s a good idea to contact a local bankruptcy attorney<\/span><\/a>. They know the law and will guide you through the bankruptcy system<\/span>.<\/p>\n

Trustee\u2019s Role<\/span> in Different Types of Bankruptcy<\/span><\/h2>\n

Chapter 7 bankruptcy<\/span><\/a> and Chapter 13 bankruptcy<\/span> are the two most common types. Chapter 7 is commonly referred to as a liquidation<\/span> bankruptcy, where the trustee sells a debtor\u2019s nonexempt assets<\/span> and distributes the proceeds to creditors. In a Chapter 13 bankruptcy<\/span><\/a>, the trustee helps the debtor devise a three- to five-year payment plan to help reorganize their debt. Chapter 13 cases<\/span> are often referred to as a reorganization bankruptcy.<\/p>\n

The bankruptcy trustee<\/span>\u2019s duties<\/a> depend on the type of case they are handling. This includes attempts to move or hide assets before or during filing. If the Chapter 7 trustee<\/span><\/a> alleges that the debtor reports false information or fails to disclose the existence of this property, the debtor may face\u00a0bankruptcy fraud<\/span> charges. It is the trustee\u2019s duty to uncover this fraud.<\/p>\n

The Bankruptcy Estate<\/span> and Bankruptcy Trustee<\/span><\/h2>\n

Understanding how the bankruptcy estate<\/span> works makes it easier to know the role of the bankruptcy trustee<\/span>. Under bankruptcy law<\/span>, a bankruptcy filing<\/span> creates a bankruptcy estate<\/span>. This estate is composed of all the debtor’s property, both real and personal<\/a>.<\/p>\n

The bankruptcy estate<\/span> is a separate legal entity from the bankruptcy debtor. The commencement of a bankruptcy case<\/span> creates an estate, which technically becomes the temporary legal owner of all the debtor’s property. In some states, the bankruptcy <\/span>court<\/span><\/a> orders<\/span> an individual to act as the trustee.<\/p>\n

This estate consists of all legal or equitable interests of any property the debtor owns on the date they file their petition<\/a>, including another person\u2019s property if the debtor has an interest in the property. Since the bankruptcy estate<\/span> is not a person, a bankruptcy trustee<\/span> must step in to oversee and protect the estate. The trustee will perform various duties required by law and the Bankruptcy Code<\/span>, such as liquidating assets<\/span> to pay creditors<\/a>.<\/p>\n

The United States Trustee<\/span> vs. the Case Trustee<\/h2>\n

The United States Trustee<\/span> and the case trustee<\/a> are not the same. A U.S. trustee is a federal employee with the Department of Justice<\/span>. They appoint an impartial case trustee to manage the bankruptcy starting at the commencement of the case.<\/p>\n

Private trustees<\/span> are not federal employees. They are private individuals who handle your bankruptcy case<\/span>, liquidate<\/span> assets, review monthly payment<\/span> plans, and interact with you and your creditors throughout the bankruptcy proceedings<\/span><\/a>.<\/p>\n

What Does a Bankruptcy Trustee<\/span> Do?<\/h2>\n

A bankruptcy trustee<\/span>‘s duties vary depending on the type of case and a debtor\u2019s financial situation<\/span>. A Chapter 13 trustee<\/span> has different duties than a trustee in a Chapter 11 bankruptcy<\/span><\/a>, and so on.<\/p>\n

When a debtor files for bankruptcy protection, it triggers certain events. For instance, when you file a Chapter 7 bankruptcy<\/span><\/a>\u200b petition, any lawsuits or other causes of action become the property of the bankruptcy estate<\/span>. The bankruptcy filing<\/span> will also trigger an automatic stay<\/a>, which protects the debtor from legal action by creditors during bankruptcy proceedings<\/span>. The stay begins as soon as you file your bankruptcy petition.<\/p>\n

The Trustee in Chapter 7 <\/span>Bankruptcy<\/span> Cases<\/span><\/h2>\n

For an individual to qualify for Chapter 7 <\/span>bankruptcy<\/span> proceedings<\/span>, they must pass the means test<\/span><\/a>. The trustee administers the Chapter 7 <\/span>bankruptcy<\/span> case<\/span>.<\/p>\n

A Chapter 7 trustee<\/span> has powers and abilities similar to those of an overseer in a Chapter 13 <\/span>bankruptcy<\/span> case<\/span>. There are several differences in these types of bankruptcies<\/span><\/a> as well.<\/p>\n

Some of the primary duties and powers of a trustee in a Chapter 7 liquidation<\/span> bankruptcy<\/a>\u200b case include:<\/p>\n