Lesson 25: Appointment and Duties

In this lesson, we will dive into the appointment and duties of a bankruptcy trustee, the unsung hero of the bankruptcy process. Think of the trustee as the referee in a sports game, making sure everything is fair and square.

Appointment of the Trustee

The appointment of the trustee is determined by the type of bankruptcy filed. In most cases, the United States Trustee appoints an interim trustee from a panel of approved trustees.

  • In Chapter 7, the trustee is appointed from a rotating panel of private trustees.
  • In Chapter 11, a trustee is rarely appointed unless there is a cause such as fraud or mismanagement.
  • In Chapter 13, a standing trustee is typically appointed to oversee the repayment plan.
Tip: The United States Trustee Program oversees the administration of bankruptcy cases and private trustees. For a deep dive, check out this comprehensive guide on bankruptcy law.

Roles and Responsibilities

The primary duties of a bankruptcy trustee include the following:

  • Reviewing the debtor's petition and schedules
  • Administering the bankruptcy estate
  • Ensuring the debtor complies with required documentation and procedural steps
  • Liquidating non-exempt assets in Chapter 7
  • Overseeing the repayment plan in Chapter 13

Trustee's Workflow

flowchart LR A["Debtor Files Petition"] --> B["US Trustee Appoints Interim Trustee"] B --> C["Trustee Reviews Petition & Schedules"] C --> D["Trustee Conducts Creditors' Meeting (341 Meeting)"] D --> E["Administering Bankruptcy Estate"] E --> F{"Chapter 7\nLiquidation?"} F -->|Yes| G["Liquidate Non-Exempt Assets"] F -->|No| H["Oversee Repayment Plan (Chapter 13)"]

Case Studies

Below is an example of how a Chapter 7 trustee might handle certain tasks:

  • John Doe files for bankruptcy under Chapter 7.
  • The interim trustee, appointed by the U.S. Trustee, reviews John's petition.
  • The trustee conducts a 341 meeting with John's creditors.
  • The trustee identifies non-exempt assets to liquidate for the benefit of creditors.

Conclusion

The trustee plays a vital role in the bankruptcy process, from overseeing the debtor's compliance to ensuring that creditors receive fair treatment. Understanding the trustee's duties helps both debtors and creditors navigate the complexities of bankruptcy law effectively.

For more details on the specific roles of trustees in different chapters, you can visit our lessons on:

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