The Bankruptcy Trustee and the U.S. Trustee

The U.S. Trustee Program performs audits and investigations and oversees the bankruptcy trustee appointed to your case.

By , Attorney · University of the Pacific McGeorge School of Law

Bankruptcy is relatively straightforward. You file financial forms, and if you're qualified and complete all requirements, you receive an order wiping out qualifying debt.

Judges aren't needed in the bankruptcy process unless a significant issue arises. Instead, the U.S. Trustee's office oversees bankruptcy filings and manages the bankruptcy trustees assigned to administer the routine aspects of each case.

In this article, you'll learn about the duties of the bankruptcy trustee and when the U.S. Trustee might take a more active role in your matter.

U.S. Trustee Program and the Department of Justice

Many people don't realize that the U.S. Department of Justice (DOJ) is responsible for monitoring bankruptcy cases. The DOJ is tasked with ensuring that debtors follow bankruptcy laws and that cases of fraud and other crimes are appropriately handled. (28 U.S.C. § 586 and 11 U.S.C. § 101, et seq.)

The DOJ fulfills its oversight duties through the U.S. Trustee Program. There are 21 U.S. Trustee offices across the country, and one of the offices is assigned to your local bankruptcy court.

Each office manages the bankruptcy trustees appointed to administer bankruptcy cases (more below). Most filers will interact exclusively with the assigned bankruptcy trustee throughout the process.

Other U.S. Trustee Responsibilities

In addition to managing the bankruptcy trustees, the U.S. Trustee broadly monitors all cases for irregularities. For instance, the U.S. Trustee will step into a case if any of these situations arise:

  • A Chapter 7 debtor makes more than the state's median income (fails the means test) or earns enough actual income to support a Chapter 13 plan.
  • A Chapter 13 filer's debts exceed the Chapter 13 debt limitations (the current amounts are in Debt Limits for Chapter 13 Bankruptcy).
  • Any filer is engaged in illegal actions that warrant investigative follow up (such as perjury).

If the U.S. Trustee decides to take an active part in your case, you can oppose whatever action the U.S. Trustee proposes. The issue will go before the bankruptcy court, and a judge will decide the outcome. Learn about the differences between Chapter 7 and 13 bankruptcy.

U.S. Trustee and Bankruptcy Audits

The bankruptcy filing system is set up to flag issues that deserve further evaluation. If something about your case makes it an outlier—say you claim higher-than-average expenses on Schedule J: Your Expenses—your paperwork will be inspected more closely and possibly audited. The purpose of the audit is to verify the information provided in the bankruptcy paperwork.

All filings are also subject to random audits. The number of cases audited varies depending on available resources. For instance, when bankruptcy filings skyrocketed after the Great Recession, audits were put on hold.

Debtors selected for auditing receive notification by mail. The notice gives the filer time to provide documentation supporting the identified issue.

Responsibilities of the Bankruptcy Trustee

Whereas the U.S. Trustee's office has broad-sweeping duties, the bankruptcy trustee is tasked with accomplishing the everyday work needed to push your petition through the process. In both Chapter 7 and Chapter 13 cases, it's the bankruptcy trustee's job to:

  • review your bankruptcy petition for accuracy
  • evaluate property exemptions
  • collect financial documents
  • verify your identity, and
  • question you under oath at the 341 meeting of creditors.

Trustees have chapter-specific duties, as well.

You can expect a Chapter 7 trustee to sell property you can't protect with a bankruptcy exemption and distribute the proceeds to creditors. A Chapter 13 trustee will review your proposed repayment plan, and if it's confirmed (approved) by the court, collect your monthly repayment plan payments and send the funds to creditors.

You'll find out who your bankruptcy trustee will be a few days after you file your bankruptcy papers. Look for a notice from the court. It will give you the trustee's name, address, and phone number. The bankruptcy trustee might be a local bankruptcy attorney or a nonlawyer knowledgeable about Chapter 7 or Chapter 13 bankruptcy and the local rules and procedures of your court.

To learn more about the role of the trustee under the different bankruptcy chapters, see What Does the Chapter 7 Bankruptcy Trustee Do? and What Does the Chapter 13 Bankruptcy Trustee Do?

Need More Info?

We want to help you find the answers you need. Go to AllLaw's Topic page for more easy-to-understand bankruptcy articles, or consider buying a self-help book like The New Bankruptcy by Attorney Cara O'Neill.

We wholeheartedly encourage research and learning, but online articles can't address all bankruptcy issues or the facts of your case. The best way to protect your assets in bankruptcy is by consulting with a local bankruptcy lawyer.

Updated April 17, 2024

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