Bankruptcy trustee

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Bankruptcy trustee is an administrator appointed by the court to oversee the debtor’s estate in a bankruptcy proceeding. The trustee can evaluate and make recommendations about various debtor demands, but cannot act without approval of the court.

A bankruptcy trustee's duties vary depending on the type of case. In a Chapter 7 case, the trustee's role is to manage the sale of the nonexempt property and then administer the distribution of the proceeds to creditors. In a Chapter 11 case, the trustee's role is to reorganize a debtor's business obligations, debts, and assets to emerge from bankruptcy and continue operation. In a Chapter 13 case, the trustee's role is to receive the debtor's monthly payments and distribute them to creditors on a payment plan. 

[Last updated in July of 2021 by the Wex Definitions Team