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The Role of a Bankruptcy Trustee

by OgdenPersonalInjury

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Who is the Bankruptcy Trustee?

When you file for bankruptcy, your case and your debts can come under the control of the court in the person of the bankruptcy trustee, whose job it is to ensure that bankruptcy laws are obeyed and that your unsecured debts are paid off as much as possible. However, the trustee's legal powers go beyond these simple administrative duties, as this person assumes legal control of your property and your debts as of the date you file for bankruptcy states Ogden Bankruptcy Attorney. To take an action without the consent of the trustee is to risk having your case dismissed.

Shortly after you file your bankruptcy papers, you will receive a notice informing you of the name, business address, and business telephone number of your trustee. This person is appointed by the Office of the United States Trustee, a branch of the Department of Justice. A trustee may be a local bankruptcy attorney, or a non-lawyer who is knowledgeable about chapter 7 and chapter 13 bankruptcy and the rules and procedures followed by the court.

Once your trustee has been appointed, he or she may contact you with a list of documents to be submitted to this person, which may include bank statements, property appraisals, canceled checks, or perhaps other such documents, and the date by which these documents should be sent.

The U.S. Trustee

In addition to the trustee appointed to handle your case, another person called the U.S. Trustee will be involved, though most people who file for bankruptcy will never have to deal with the U.S. Trustee. Most of the time the U.S. Trustee will only take action if your chapter 7 bankruptcy papers and/or testimony at the creditor's meeting indicate that:

  • you earn a monthly income greater than the state median
  • your actual income is enough to support a chapter 13 repayment plan
  • you are suspected of having engaged in some sort of illegal action which warrants investigation
  • your case is the one in 250 cases randomly selected for audit

Should the U.S. Trustee take action in your case, all parties to the case will be notified of the proposed action.

What is the Function of the U.S. Trustee and where is it Located?

The Office of the U.S. Trustee is an executive branch agency that is part of the Department of Justice explains Ogden Bankruptcy Attorney. Its responsibilities include monitoring the administration of bankruptcy cases and detecting bankruptcy fraud. It is also responsible for appointing interim trustees to administer chapter 7 cases from a previously appointed panel of private individuals, lending support to and overseeing the debtor-in-possession in chapter 11 cases, and appointing and supervising standing trustee in chapter 13 cases.


The individuals appointed by the U.S. Trustee to serve as interim or standing trustees in individual bankruptcy cases changes over time. If you would like additional information regarding either the trustee program in general or individual trustees, you should contact the Office of the U.S. Trustee or the Region 17 Office of the U.S. Trustee website.

If you are into deep financial trouble and are planning to file for bankruptcy, it is very important for you to be aware of the role of a bankruptcy trustee in this regard. For every case that is filed, the court appoints an impartial trustee. No matter whether you are filing under chapter 7 or chapter 13, you cannot ignore the role of the trustee. In every case, the trustee will represent the creditors. However, it does not mean that the trustee will act always in favor of creditors only. In fact, the main duty of the trustee is to make sure that everything is done as per the laws and as per the judgment of the court.

The Role of the Trustee

The main duty of the trustee is to represent the creditors. However, this role changes, depending upon the different types of cases and the judgment given by the bankruptcy court. These legal professionals are usually the representatives of the creditors, but depending upon case to case, it is also their duty to keep a watch on the debtor's action. For example, if it is a chapter-7 case, their duty is to make sure that all the assets and properties of the debaters have been liquidated as per the laws. At the same time, they also work in favor of the debtors, by making sure that they get the properties exceptions as per the specific laws of that particular state regarding the same say Ogden Bankruptcy Attorney. On the other hand, if it is a chapter-13 case, the bankruptcy trustee keeps a watch on the debtor's business activity. In some cases, they even work hand in hand with the debtor in order to ensure smooth and profitable running of the business of the debtor. At the same time, they also keep a watch whether the debtor is religiously working on the repayment plan suggested by the court or not.

How does the Trustee Work?

There are several ways a bankruptcy trustee carries out its work. However, whatever way they follow, their main objective is always to protect the interest of the creditors. For example, the trustee can distribute the funds to appropriate creditors, object to discharge, or certain exemptions a debtor may claim, collect property of the estate, liquidate nonexempt property in the estate, etc.

The Degree of Involvement

As said earlier, the degree of involvement of the trustee varies from different types of bankruptcy. For example, since in chapter 7 bankruptcy, the role of the trustee is very limited. In chapter 13, the degree of involvement is much more. Moreover, in chapter 11, their job is multi-layered.

Overall, we can see that the job of the bankruptcy trustee is a balancing act. They do not only have to keep the interests of the creditors in mind, but it is also their duty to provide assistance in the smooth performance of the debtor's plan. In the United States of America, there is an organization "the United States Trustee" that appoints all these trustees.

A bankruptcy trustee plays an important role. When a bankruptcy court gives judgment regarding a case, it is the duty of the trustee to make sure that the money retrieved from liquidation of debtor's assets is properly distributed among the creditors. However, the role of the trustee varies from case to case. For example, in a chapter 7 bankruptcy, their role is very limited.

Chapter 7 Bankruptcy

When you file for chapter 7 bankruptcy, your trustee will have a vested interest in your property, and how much you claim as exempt. The reason for this is that the trustee receives a commission on property that is sold in order to pay off unsecured debts. The trustee's commissions may be 25% of the first $5000, 10% of everything from $5000 up to $50,000, and 5% of any additional money up to one million dollars (though most of you won' t have to deal with that much value in your bankruptcy case).

If all of your property is exempt under the applicable state laws, than your case will be considered a "no-asset" case; in such a case your creditors will be told not to file claims since you don't have any property to sell off to pay them. In such a case, your trustee will not be too interested unless your papers indicate that you may be hiding assets. In the case that you do have nonexempt assets to be sold off, your trustee will manage the selling of these assets.

Chapter 13 Bankruptcy

If you file for chapter 13 bankruptcy, your trustee's role will be to oversee your payments under the repayment plan. In the event that you miss a payment, your trustee will help you get back on track, even give you a temporary reprieve if you need it. The trustee will also participate in any hearings on the value of your property tells Ogden Bankruptcy Attorney. However, in most chapter 13 bankruptcies, you maintain complete control of your money and any property you acquire after your bankruptcy filing, so long as you are able to keep up your payment schedule. Your trustee can also amend your payment plan in the event that your income or property increases during the course of your case.


About the Author

Need help from an experienced Personal Injury Lawyer in Ogden Utah? Let the attorneys at The Law Office of Roy D Cole represent your case. Call us at (801) 784-3466 for more information or visit us at

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