What is the Role of the Bankruptcy Trustee?

The bankruptcy trustee is the person who represents the combined interests of your creditors during your bankruptcy case. The role of the trustee is generally to represent the creditors' interests; however, the trustee's duties differ depending on the type of bankruptcy case that has been filed.

In a Chapter 7 case, the trustee manages the sales of the your non-exempt property and uses those funds to pay expenses and distribute the balance to your creditors. However, as most Chapter 7 bankruptcies are no-asset cases (meaning there is no property for the trustee to sale), the trustee rarely has to do this.

In a Chapter 13 case, the trustee is responsible for receiving your monthly payments and distributing those funds to your creditors. The trustee is also responsible for reviewing your repayment plan and ensuring that the plan is fair and practical. The trustee will often act as a negotiator between you and your creditors and ensure that both the creditors' and your interests are maintained in accordance with the bankruptcy laws.

Categories: Chapter 13, Chapter 7