A Bankruptcy Trustee Will Play A Significant Role In Your Case

On Behalf of Steele Law Firm PLLC | Nov 13, 2018 | Uncategorized

Choosing to file for bankruptcy is a major step in getting your finances back on track. If you have already begun this process, you should feel proud for taking responsibility for your situation and doing your best to get out from under outstanding debt.

During your bankruptcy proceedings, you will likely have several people involved in your case. You may understand that your creditors, your attorney and a judge will play their roles, but you may wonder how other individuals will fit in. In particular, you may want to gain information on what a bankruptcy trustee does during the legal proceedings.

A new estate

Once you file for bankruptcy, a new estate is created, which is separate from your personal estate. Your property will make up the bankruptcy estate, but you cannot manage that estate. As a result, a bankruptcy trustee takes over management of the bankruptcy estate. This person will have various responsibilities when it comes to managing the estate.

Because the trustee does not have any personal obligation or loyalty to either you or your creditors, the person will make unbiased decisions throughout the bankruptcy proceedings. Those decisions and duties also differ depending on whether you utilize Chapter 7 or Chapter 13 bankruptcy.

Chapter 7 duties

With Chapter 7 bankruptcy, or liquidation bankruptcy, the trustee will have the following duties:

  • Gathering all your property
  • Selling, or liquidating, that property
  • Making challenges against creditor claims when necessary
  • Distributing proceeds from sold property to your creditors
  • Objecting to the discharge of certain debts when appropriate

The trustee may also have to complete other actions depending on the circumstances.

Chapter 13 duties

Chapter 13 bankruptcy involves repaying debts by using a repayment plan rather than liquidating assets. As a result, the trustee will need to attend to the following tasks:

  • Going over your proposed repayment plan
  • Objecting to the plan if necessary
  • Collecting payments from you in accordance with your repayment plan
  • Making payments to creditors

As you can see, the trustee will have a great deal of responsibility in your bankruptcy case no matter which type you file.

Other factors

Of course, your bankruptcy case will also involve other people and other factors that will greatly affect your case. Fortunately, you can enlist the help of a Texas attorney to help you through the process and explain each person’s role in your situation.


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