The Bankruptcy “Trustee” in a Chapter 7 case is the person appointed by the Court system to administer any assets and to ensure that the debtor has complied with the law and the rules in the case. The Trustee exercises various legal powers provided under Bankruptcy law and acts as a representative for all the creditors in the case. A private individual, the Trustee’s duties include the duty to review the debtor’s Bankruptcy Schedules, to file any necessary lawsuits against creditors or other parties to recover assets, to review and settle claims if necessary and to make pro rata distributions to creditors if assets or funds are recovered or available in the case.
If there are no assets that will benefit creditors in the case, the Trustee files a report called a “No Asset Report” and the case is closed. There is also a Trustee in Chapter 13 cases (commonly called the “Standing Trustee” because the same person oversees all the Chapter 13 cases in a typical District) and this Trustee has similar duties plus the duty to oversee the debtor’s Reorganization Plan and make payments to creditors. The Chapter 13 Trustee also has the power to “object” to the debtor’s Plan and argue against the Plan before the Bankruptcy Judge. But only the Bankruptcy Judge decides whether a Plan will be “confirmed.”