What Does a Bankruptcy Trustee Do?

United States Bankruptcy Trustees Protect the Integrity of the Bankruptcy Process

United States Trustees oversee bankruptcies in the federal bankruptcy courts. These trustees are appointed by the U.S. Attorney General.

The duties of United States Trustees include the following:

  • Appointing and supervising private bankruptcy trustees or acting as a trustee to administer consumer bankruptcies
  • Enforcing the bankruptcy code and preventing fraudulent claims
  • Referring cases for legal action, investigation or prosecution
  • Ensuring estates are administered efficiently, quickly and correctly
  • Ensuring professionals charge reasonable fees for bankruptcy filings
  • Convening creditors’ committees for business reorganization
  • Reviewing disclosures and applications for professional services
  • Ensuring Bankruptcy Court procedures and rules are followed

After you file for bankruptcy, the United States Trustee for your Texas jurisdiction will appoint and supervise an impartial private trustee to administer your bankruptcy (Chapters 7, 12 or 13). Though private trustees are not government employees, they do work very closely with the United States Trustees to get the maximum return on your assets. There are different actions for different types of bankruptcy filings.

Panel Trustees Administer Chapter 7 Liquidation Bankruptcies

Private trustees for Chapter 7 bankruptcy are appointed to a panel by the United States Trustee in the federal judicial district. These private trustees are selected to work on a bankruptcy filing via a rotation process. Chapter 7 trustees gather your non-exempt assets, liquidate the assets, and distribute the proceeds to your creditors.

Standing Trustees Administer Chapters 12 and 13 Reorganization Bankruptcies

Private trustees for chapter 12 and chapter 13 reorganization bankruptcies have a standing appointment from the United States Trustee to administer these bankruptcies in a specific geographic region. Chapter 12 and chapter 13 bankruptcies help consumers reorganize their finances using a repayment plan. Private standing trustees evaluate your financial situation and make recommendations to the court for a repayment plan that must be completed within three or five years. After the court evaluates and approves the plan, the standing trustee will administer the plan by collecting funds from you and distributing those payments to your creditors.

Trustees are not Responsible for Giving You Legal Advice

The bankruptcy courts and trustees recommend that you get legal representation before filing for bankruptcy. Trustees are working in the interest of the bankruptcy court. They do not represent your legal interests.

Overwhelming debt, creditor harassment and other financial stress factors can impact your finances, health, job performance and relationships. An experienced bankruptcy attorney provides the legal advice about whether or not filing for bankruptcy makes sense for your financial circumstances.

Get Help From a Knowledgeable Texas Bankruptcy Attorney

The Oliva law firm helps people in Brownsville, McAllen, Harlingen, Corpus Christi and throughout the Rio Grande Valley get a fresh start with bankruptcy and other debt management strategies. Call (956) 683-7800 or contact us online if you have questions about bankruptcy and debt management.

Marcos Oliva
About the Author: Marcos Oliva
Marcos Oliva is the principal attorney at Oliva Law. He is admitted to practice law in the State of Texas, the United States District and Bankruptcy Courts in the Southern District of Texas, and the United States Patent and Trademark Office.