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What Does A Bankruptcy Trustee Do?


Anyone who is planning to file for bankruptcy, whether a consumer bankruptcy or commercial bankruptcy, should have a clear understanding of how the bankruptcy process will work and the roles of key figures in the bankruptcy case. The trustee is an important entity in bankruptcy proceedings, and it is important to understand the trustee’s role in relation to the party filing for bankruptcy. In general, the trustee’s role will vary depending upon the type of bankruptcy filing, and the trustee has quite different roles in liquidation bankruptcies versus reorganization bankruptcies. Yet overall, the trustee has the important role of administering a bankruptcy estate and taking care of matters that arise in the bankruptcy case.

What is a Bankruptcy Trustee?

Trustees in bankruptcy cases are named by the bankruptcy court. The Cornell Legal Information Institute (LII) explains that a bankruptcy trustee is “an administrator appointed by the court to oversee a debtor’s estate in a bankruptcy proceeding.” Further, the LII clarifies, a bankruptcy trustee has the power to “evaluate and make recommendations about various debtor demands.” In order to act on a debtor’s request, or to take specific actions in a bankruptcy case, a trustee must have approval from the bankruptcy court. Trustees can be individuals or entities (i.e., corporations).

The term “trustee” is used in various circumstances and is not just applicable to bankruptcy cases. For example, if you or someone you know establishes a trust as part of the estate planning process in Florida, there will also be a “trustee” associated with the trust who handles the trust and issues connected to it. A bankruptcy trustee is distinct from a trustee associated with a revocable or irrevocable trust in Florida, but a bankruptcy trustee is similarly tasked with administration. A bankruptcy trustee, like any other type of trustee, a third party who has no interest in the case or the estate. In a bankruptcy case, the trustee is tasked with handling the assets of the debtor and various aspects of the bankruptcy case. A trustee’s specific duties are determined by the type of bankruptcy case.

Roles of a Bankruptcy Trustee 

As we noted above, the trustee’s role will vary depending upon the type of bankruptcy case, yet there are some commonalities across different types of bankruptcy cases. Generally speaking, a bankruptcy trustee will verify the documents you submit as part of your bankruptcy case and will analyze your documentation for any issues or concerns about fraud. In both liquidation and reorganization bankruptcy cases, the bankruptcy trustee is responsible for scheduling the 341 meeting of creditors and managing the meeting.

In a Chapter 7 liquidation bankruptcy, the bankruptcy trustee is tasked with identifying and liquidating all of the nonexempt property of the debtor. The trustee will then distribute the money made from the liquidation to creditors. In a reorganization case, the bankruptcy trustee collects regular payments from the debtor associated with the debtor’s repayment plan. In a Chapter 11 case in particular for a business, the trustee is also tasked with “monitoring the debtor in possession’s operation of the business and the submission of operating reports and fees,” according to the U.S. Courts.

Contact a Bankruptcy Lawyer in West Palm Beach 

The experienced West Palm Beach bankruptcy lawyers at our firm can tell you more about the bankruptcy trustee and what you should expect in your bankruptcy case. Do not hesitate to get in touch with the attorneys at Kelley Kaplan & Eller.




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