What is a Bankruptcy Trustee?

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Written by Kristin Turner.  Reviewed by Andrea Wimmer, Esq.
Updated June 16, 2020


The bankruptcy trustee is responsible for reviewing your case and conducting the meeting of creditors. Understanding what they do will help you become even better prepared in your bankruptcy case.

The bankruptcy trustee plays an important role in a bankruptcy case. When you file a Chapter 7 or a Chapter 13 bankruptcy, it can be extremely helpful to understand the responsibilities of the bankruptcy trustee serving in your case. It is also helpful to understand some of the authorities granted to the bankruptcy trustee serving in your case.

A key factor to understand is that the bankruptcy trustee is not “out to get you” because you filed for debt relief. The bankruptcy trustee has a clearly defined set of rules and regulations that they must follow. The person serving as trustee is simply doing a job and is bound by the law just like any other person involved in your bankruptcy case.

Below is a discussion of some of the important information you need to know about the United States Trustee, Chapter 7 trustees, and Chapter 13 trustees.

What is the United States Trustee’s Office?

The Bankruptcy Reform Act of 1978 established the U.S. Trustee Program, initially as a pilot for only a number of districts, but ultimately expanding to all districts except in Alabama and North Carolina. As a section of the U.S. Department of Justice, the U.S. Trustee’s Office, or UST for short, is tasked with overseeing bankruptcy trustees. The office also oversees the administration of bankruptcy cases filed under all chapters of the Bankruptcy Code.

The U.S. Trustee’s Office makes sure that bankruptcy laws are followed and issues dealing with bankruptcy fraud are handled correctly. Thankfully, most debtors never deal with the UST.

The office does randomly select one out of every 250 bankruptcy cases filed to be audited. In most cases, the audit is performed by sending a letter to the filer requesting information and documentation verifying the information in their bankruptcy forms, especially the means test forms. Misstatements or other issues are only found in a small percentage of cases. The key is to respond to the audit request promptly and provide all requested information.

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What is a Chapter 7 Bankruptcy Trustee?

A Chapter 7 bankruptcy trustee administers cases filed under Chapter 7 of the Bankruptcy Code. The trustee is appointed to your case by the bankruptcy court when you file your Chapter 7 bankruptcy petition. You don’t have a choice of which bankruptcy trustee is appointed to administer your case. Many bankruptcy districts have more than one Chapter 7 bankruptcy trustee.

The Chapter 7 bankruptcy trustee reviews the bankruptcy forms filed in your case for accuracy. Additionally, the Bankruptcy Code requires all filers submit their federal income tax return for the most recent tax year to their trustee at least 7 days before their Meeting of Creditors. The trustee may also request additional information to determine if the forms are complete and accurate. 

The Chapter 7 bankruptcy trustee may object to various items in the bankruptcy forms, including the bankruptcy exemptions the filer claimed. If the Chapter 7 bankruptcy trustee believes the debtor has committed bankruptcy fraud or fails to perform all duties required by law, the trustee can object to the debtor’s discharge.

One of the important roles of the Chapter 7 bankruptcy trustee is to conduct the 341 Meeting of Creditors. The 341 Meeting usually takes about five to ten minutes to complete. The debtor is placed under oath while the trustee asks questions about the bankruptcy forms and the debtor’s financial matters. Creditors rarely appear to ask questions.

Another important role of the Chapter 7 trustee is to review each of the debtor’s assets to determine if any property might have non-exempt equity. The trustee reviews the value of the asset, less any bankruptcy exemptions claimed and any secured liens, to determine the net equity.

If enough nonexempt property exists, the bankruptcy trustee may sell the property. The proceeds of the sale are used to pay the claims of unsecured creditors on a pro-rata basis. This is based on the claims filed by creditors. The trustee reviews and either approves or objects to the claims filed by creditors. 

The good news for you is that most of the Chapter 7 cases filed in the United States are no-asset cases. In a no-asset Chapter 7 case, the debtor keeps all property while getting rid of most or all unsecured debts.

Matching bankruptcy exemptions to each asset listed on the bankruptcy schedules is important to determine if any property may be at risk. It’s important to list all property you own because you can’t benefit from bankruptcy exemptions if you don’t list the property on your bankruptcy forms.

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What is a Chapter 13 Bankruptcy Trustee?

A Chapter 13 bankruptcy trustee has many of the same duties as a Chapter 7 bankruptcy trustee. The Chapter 13 bankruptcy trustee reviews the debtor’s schedules for accuracy and conducts the 341 Meeting of Creditors.

However, a Chapter 13 bankruptcy trustee must also review the proposed repayment plan to determine if the plan complies with bankruptcy laws. The Chapter 13 trustee may even require changes to the plan to correct any problems before the court confirms the plan.

During a Chapter 13 case, the Chapter 13 bankruptcy trustee receives the debtor’s monthly payments and makes payments to creditors with an allowed claim as outlined in the bankruptcy repayment plan.

During the Chapter 13 case, the bankruptcy trustee may periodically review the debtor’s tax returns and payment history to ensure the repayment plan does not need to be modified. In addition, the Chapter 13 bankruptcy trustee reviews motions to incur debt, motions to sell property, and other motions submitted to the court by the filer and, while the decision is ultimately with the court, may file an objection to these motions.

When the filer has made the last bankruptcy plan payment, the Chapter 13 bankruptcy trustee conducts an exhaustive audit of the case. The debtor typically has nothing more to do except to wait for the final report of the Chapter 13 bankruptcy trustee.

Once the U.S. Trustee’s Office approves the final report filed by the Chapter 13 bankruptcy trustee, the court typically issues the order closing case and order of discharge. Chapter 13 cases can be difficult to file because repayment plans are complex to calculate. Most people retain a bankruptcy attorney to help them file a Chapter 13 case. However, you may qualify to file a Chapter 7 case, and many people file a Chapter 7 case without an attorney.

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Do You Need to File a Chapter 7 Bankruptcy Case?

If you have debts that you cannot afford to pay, you may be able to get rid of those debts by filing for bankruptcy relief. In many Chapter 7 cases, debtors get rid of all unsecured debts while they keep all their property.

Some people are afraid of filing a Chapter 7 case because Chapter 7 is known as a liquidation bankruptcy. The “liquidation” refers to a bankruptcy trustee selling property that is non-exempt. However, as we discussed above, most Chapter 7 cases are no-asset cases, so you can get a fresh start without worrying about losing your property.

While hiring a bankruptcy attorney is certainly advisable if you can afford to do so, people who don’t have enough money for an attorney can still get the same debt relief by filing a Chapter 7 bankruptcy case without an attorney.

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Filing Chapter 7 Without an Attorney

If this sounds like the solution for you, we invite you to request more information about Upsolve, a non-profit company who assists low-income households file a Chapter 7 bankruptcy case at no cost. We have developed a system that provides the information, guidance, and support that allows you to file for bankruptcy relief without an attorney. Upsolve does not charge anything to use our web app. It’s our mission to empower low-income individuals who can’t afford to hire a lawyer get out of debt.

Watch past users, who were in the same financial position as you are right now, explain how they filed a Chapter 7 bankruptcy with the help of Upsolve. Their success stories will uplift you in addition to encouraging you. You can file Chapter 7 even if you cannot afford to pay a bankruptcy attorney.

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About the authors

Andrea Wimmer, Esq.

Andrea practiced exclusively as debtors’ counsel in consumer chapter 7 and 13 cases for more than 10 years before joining Upsolve, first as a contributing writer and editor and ultimately joining the team full time in August 2019. While in private practice, Andrea handled all ban... read more

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Upsolve is a 501(c)(3) nonprofit that started in 2016. Our mission is to help low-income families who cannot afford lawyers file bankruptcy for free, using an online web app. Spun out of Harvard Law School, our team includes lawyers, engineers, and judges. We have world-class funders that include the U.S. government, former Google CEO Eric Schmidt, and leading foundations. It's one of the greatest civil rights injustices of our time that low-income families can’t access their basic rights when they can’t afford to pay for help. Combining direct services and advocacy, we’re fighting this injustice.

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