If you’re filing for bankruptcy, you may be wondering what a trustee is, and what role he will play in your bankruptcy.  The trustee’s role is to act as a representative of your creditors.  The involvement of the trustee will vary, depending on which chapter of bankruptcy you’re filing.  Even though the trustee’s role is to represent your creditors, he will also make sure that your bankruptcy plan runs as smoothly as possible.

Your bankruptcy trustee is appointed by U.S. Trustee, who is an officer of the Department of Justice.  Your trustee can object to discharging certain exemptions, collect property on behalf of your creditors, liquidate nonexempt property, and distribute the proceeds to your creditors.  Let’s look at the role of the trustee in Chapter 7 versus Chapter 13.

The trustee’s role is very minimal in a Chapter 7 bankruptcy filing.  In most Chapter 7 cases, you will not have any assets available.  However, if you do have assets, the trustee is responsible for liquidating those assets and distributing the funds to your creditors.  He will participate in creditor meetings and oversee the sale of assets.  In a Chapter 7 bankruptcy, your trustee will look at exemptions, schedules, and verify that you are following the bankruptcy plan outlined by the court.  Your trustee has the power to deny an exemption if there is evidence of fraud, or ineligibility.

In a Chapter 13 filing, the trustee’s role is much more involved.  Since there is no liquidation of assets in a Chapter 13 filing, the trustee’s role is to manage to your financial affairs to aid in paying back your creditors.  Your trustee will attend all hearings that involve property valuations, and will manage receipt of payment from you to your creditors.  He will also manage the dispersal of funds to all of your creditors.  Your bankruptcy attorney will try to understand the particular tendencies of your trustee, and work to structure the best possible outcome for your case.