Atlas Law Firm

Who is a bankruptcy trustee?


If you’re considering filing for bankruptcy and have done some online research into the process, you’ve likely come across numerous references to bankruptcy trustees.


If you’re considering filing for bankruptcy and have done some online research into the process, you’ve likely come across numerous references to bankruptcy trustees. These professionals are typically glossed over in discussions of Chapter 7 and Chapter 13 bankruptcy cases, but their role is important to understand.

The bankruptcy trustee is not the judge in your case, nor are they a representative of your creditors. In larger terms, their role is to be an impartial observer and administrator of the proceedings during your bankruptcy and, if you have filed for Chapter 13, throughout your repayment plan.

Trustees are most often appointed by the United States Trustee or the Unites States Department of Justice and are usually attorneys with extensive experience in bankruptcy law. Rarely, your creditors may appoint the trustee. These professionals are tasked with overseeing the 341 hearing, which we discussed in a previous blog post, and administering funds to creditors.

In a Chapter 7 bankruptcy case, the trustee’s role is simple. At the 341 hearing, they will ask you questions about the information in your petition, including assets, and evaluate them independently. The trustee will then submit a report to the judge recommending how much, if any, of your assets can be turned over to the “bankruptcy estate” and liquidated to make some amount of payment to your creditors. For a great majority of our clients, we are able to protect all their assets. Once your filing is approved, your creditors will either receive no payment on the debt or submit claims to get a pro rata payment of the funds available. The balance of your debt is then discharged, and you are no longer liable for repayment of the debts.

During Chapter 13 bankruptcies, the trustee will also evaluate your assets, but after you propose a payment plan, they will review that as well. The payment plan is your proposal of what you can afford to pay your creditors given your income and budget over a period of three to five years. Following the approval of that plan, the trustee will collect your monthly payments and distribute amounts to your creditors.

Though there is nothing to fear about bankruptcy trustees, it’s always recommended that you partner with an experienced Twin Cities bankruptcy lawyer. Only an experienced professional can help you get back on your feet financially.

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