Types

• A bankruptcy trustee performs different services depending on the type of bankruptcy underway. In a Chapter 7 bankruptcy, usually an individual's bankruptcy, the trustee liquidates the assets of the debtor, oversees their sale and distributes the proceeds to the creditors. In a business-related bankruptcy, or Chapter 11, the trustee oversees the company's reorganization of its debts so it can keep operating and pay back the creditors. In Chapter 12 bankruptcies, which apply to family farms and fishermen, the trustee oversees the reorganization of debts and the repayment of some or all of the creditors. In a wage-earner, or Chapter 13 bankruptcy, the trustee also oversees a reorganization and repayment plan. In general, the bankruptcy trustee is the person who administers the bankruptcy estate.
  
  

Finding and Selling Assets

• A bankruptcy trustee is the person who ensures that the bankruptcy estate is handled in such a way as to raise as much money as possible to pay to the creditors. One of his main jobs is to find the debtor's assets, which may involve dozens of bank accounts, properties, real estate transactions, stocks, bonds and other investment instruments. Some assets purportedly held by other people may form part of the bankruptcy estate, and at times the bankruptcy trustee will negate payments by the debtor to a creditor if he determines those payments were made in anticipation of the bankruptcy. Once the assets are identified, assuming they are not exempt from the bankruptcy proceedings, the bankruptcy trustee sells them at the highest price possible within a reasonable time frame.
  
  

Distribution of Assets

• When the debtor's property has been liquidated, the trustee is the person who will make a plan to distribute the proceeds of the sales to the creditors. When the proceedings from the liquidation have been distributed, the bankruptcy trustee recommends to the court that the debtor be discharged from her debts--that is, be declared no longer responsible for repaying them.
  
  

Reporting

• The bankruptcy trustee is responsible for documenting in detail the steps that have been taken during the bankruptcy proceeding, including all actions that she has performed on behalf of the estate.
  
  

Legal Matters

• The bankruptcy trustee is also the person who looks for fraud or abuses of the bankruptcy system. If he thinks that fraud has occurred, he will take legal action. If he feels a criminal act has taken place, he will turn the matter over to law enforcement to conduct an investigation and take criminal action if that is indicated. The bankruptcy trustee oversees the fees charged by professionals in the action and makes sure they are reasonable.