The Short Answer
A bankruptcy trustee is a federal government-appointed official — typically a bankruptcy attorney or accountant — assigned to oversee your case. Every bankruptcy filing, whether Chapter 7 or Chapter 13, gets a trustee. In Chapter 7, the trustee's job is to identify any unprotected assets that can be sold to pay creditors. In Chapter 13, the trustee reviews your repayment plan and distributes your monthly payments to creditors according to that confirmed plan. Either way, the trustee's core function is the same: verify that you're being honest and that the process follows the rules.
A trustee is an individual appointed by the federal government in charge of overseeing bankruptcy proceedings. Chapter 7 bankruptcy and Chapter 13 bankruptcy trustees are usually bankruptcy attorneys or accountants.
Regardless of whether you file a Chapter 7 or Chapter 13 bankruptcy, a trustee will be appointed to your case. The trustee’s main function is to ensure that the debtor complies with rules and regulations, and is not being deceitful or committing fraud. The appointed trustee will examine the bankruptcy filing to make sure there is no fraud involved. The trustee may request additional documents from the debtor in order to verify the information in the bankruptcy petition is accurate and truthful. If the trustee suspects fraud, he/she may seek to have the case dismissed.
The role of the trustee differs under different chapters of the Bankruptcy Code. Examples of specific duties of a Chapter 7 trustee and Chapter 13 trustee are as follows:
The Chapter 7 trustee’s primary role is to look at any property and assets listed in the bankruptcy and determine which assets (if any) are not protected. The trustee is looking for anything of value that he/she can sell to pay back your creditors. The trustee oversees the process of selling any assets and equally distributing the proceeds to your creditors.
A Chapter 13 bankruptcy consists of paying back all or part of your debts over three to five years. The Chapter 13 trustee is responsible for reviewing your repayment plan and will oversee this repayment process making sure everything goes according to plan. In a Chapter 13 you will be required to send a payment to the trustee every month. One of the main duties of a Chapter 13 trustee is to ensure the debtor makes their monthly payments so he/she can disburse those payments to the creditors according to the debtor’s confirmed plan.
Key Takeaways
- A trustee is appointed to every bankruptcy case — both Chapter 7 and Chapter 13 — without exception.
- The Chapter 7 trustee focuses on finding non-exempt assets that can be liquidated to repay creditors.
- The Chapter 13 trustee reviews and monitors your 3-to-5-year repayment plan and distributes your monthly payments to creditors.
- Both trustees scrutinize your petition for accuracy and can request additional documents to verify the information you submitted.
- If a trustee suspects fraud or dishonesty, they can move to have your case dismissed — so full disclosure in your filing is critical.
- In North Carolina, specific trustees handle specific courts: for example, Anita Jo Kinlaw Troxler serves the Greensboro division and Al Overcash serves the Charlotte and Asheville divisions.
Attorney Insight
The mistake I see most often is clients thinking the trustee is their ally — someone there to help them through the process. The trustee works for your creditors, not for you. In Chapter 7 cases here in North Carolina, trustees routinely dig into bank statements, tax returns, and recent transfers to see if anything of value was moved before filing. If you transferred property or paid back a family member in the months before your case, the trustee has the authority to reverse that transaction — and that surprises people every time.
