Bankruptcy Trustee Duties… Across The Various Chapters!

A bankruptcy trustee is an individual who is in charge of the administration process of the bankruptcy. The trustee is generally appointed by the court and supervises the bankruptcy process. Acting as a negotiator between the creditor and the debtor, the trustee’s chief duty is to oversee that the interests of both the parties are maintained.


After filing of your bankruptcy petition, you are assigned a bankruptcy trustee. The trustee could be a bankruptcy lawyer, or someone who has extensive knowledge about the various chapters and their laws. You need to submit details of your bank statements, your account details, and property appraisals to the trustee by a date assigned by the bankruptcy court trustee.

A bankruptcy trustee is responsible for:

  • Reviewing the documents for any fraudulent practices.
  • Chairing meetings with the creditors.
  • Selling non-exempt assets.
  • Distributing funds to all the creditors.

However, bankruptcy trustee duties vary according to the chapter that the trustee is handling. When a trustee is handling chapter 7 bankruptcy, he/she acquires information about your property and in case of non-exempt assets supervises the sell out. It is the bankruptcy court trustee’s responsibility to gather the property that is non-exempt, manage the sale as well as the funds received from that sale, and then pay the creditors the amount owed to them by the debtor. If all the property is exempt, then the trustee has the responsibility to inform the creditors that the debtor has no asset to pay off the claims.

Under chapter 13 bankruptcy case, the bankruptcy trustee duties include to oversee that the payments are duly made according to the repayment plan. The trustee receives the payments from the debtor on a monthly basis and distributes it accordingly amongst all the creditors. The trustee is often required to act as a negotiator between the debtor and the creditor and sees that the interest of both the parties is taken into consideration. In case a payment is missed, it is duty to help you get back on schedule.

While in chapter 7, trustee has great control over your property; in most chapter 13 cases, the control is in the debtor’s hands and the trustee makes sure you keep up according to the plan. The trustee also has the power to review the plan and make any changes if he/she sees it fit. However, if the debtor and the trustee don’t agree on the repayment plans, then a judge is involved who confirms the plan.

Under chapter 11, the bankruptcy trustee duties include to review the request of the debtor for early emergency orders and to see that it is authentic, for example a debtor might appeal to seek emergency financing to pay off certain creditors. It is the responsibility of the trustee to see if these requests are genuine as they affect the interest of the creditors as well. Another of trustee duties is to create official committees that uphold the creditor group’s interest, appoint members for the same committees, and supervise their actions.

The trustee also ensures that all the reports, fees, and schedules are timely submitted and that the debtor is managing his/her money and assets in compliance with bankruptcy code.

To sum up, in all the chapters a bankruptcy trustee is appointed by the court who takes charge of the clearing off the loan by the debtor. The trustee is a mediator who has to take into account the interest of both the parties involved, that is the debtor and the creditor.

The bankruptcy trustee’s basic duty across all the chapter is to make sure that the creditors get their money back be it through selling the property of the debtor, or by making monthly payments without harassment of the debtor. In chapter 7, trustee’s duties require him/her to assess the debtor’s property and make the sale. The trustee enjoys a very important role and also gets some commission once the sale is made. In chapter 11, the trustee’s function is to create committees that would see that the creditors are getting their due. While in chapter 13, the trustee’s duty is to collect payment in accordance to the repayment plan and distribute the same to the creditors.

1 thought on “Bankruptcy Trustee Duties… Across The Various Chapters!”

  1. Thanks for the information. I feel that our country is in such a mess that we will continue to see an inflated number of bankruptcies for the next 5yrs.

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