What Is A Bankruptcy Trustee?


Your bankruptcy attorney is your advocate when filing for bankruptcy, unlike the bankruptcy Trustee assigned to your case. A Trustee is assigned in both Chapter 7 and Chapter 13 bankruptcy cases and are there to act in the best interest of the creditors and is assigned by the Bankruptcy Court. The U.S. Justice Department appoints bankruptcy Trustees and they are normally attorneys with significant experience in bankruptcy laws and practices. The Trustee's job is to review and administer all aspects of the bankruptcy filing including the debtor's petitions and schedules; conduct the creditor meetings and administration of the bankruptcy estate.

In a Chapter 7 bankruptcy, the Trustee's job is to distribute any of the debtor's non-exempt property to creditors and administer the estate of the bankruptcy. The Trustee reviews schedules of liabilities and assets, reviews exemptions requested by debtor, and checks for domestic support obligations owed by the debtor. When non-exempt property is available, the Trustee oversees the process of selling the property and the distribution of the proceeds amongst the creditors. Additionally, the Trustee attends the creditors' meetings and ensures that the bankruptcy is progressing according to typical practices.

In the administration of a Chapter 13 bankruptcy, the Trustee's job is to review and administer the reorganization plan submitted to the bankruptcy court to verify the reasonableness and accuracy. After review, the repayment plan is submitted to the creditors and they now have the opportunity at the Creditors' Meeting to challenge the proposed plan. During the Creditors' Meeting, the Trustee is present; however the bankruptcy judge is not. This meeting with the creditors can be a stressful event; it is vital to have a Chicago bankruptcy attorney by your side. During the meeting, debtors are questioned under oath by both creditors and the Trustee. The Trustee's recommendation to the bankruptcy Judge carries a lot of weight; it is always advisable to consult with your bankruptcy attorney prior to the meeting. After the meeting, the Judge will hold a confirmation hearing and decide whether to deny the plan, or confirm it. Once confirmed, the debtor sends the monthly payments to the Trustee, and the Trustee distributes the monies to the creditors.

The creditors have an advocate, the Trustee. While the Trustee looks out for the best interest of his/her "clients" (the creditors), the job of your bankruptcy attorney is to look out for your best interests. Bankruptcy can be a stressful and time consuming process; it is vital to have a Chicago bankruptcy lawyer on your side to help navigate through the process.