When a client and his/her attorney file for bankruptcy it isn't automatically assumed that everything listed on the petition is the exact truth. Attorneys in general will not file any claims unless they know the information is accurate, on the other hand, the attorney is counting on the client’s honesty to ensure all the correct information is available.

In most bankruptcy cases the attorney filing the petition has already revised all the paperwork to find out if any claims being made are inaccurate.  When the case is filed, the trustee will go over all information supplied by the client, searching for mistakes or reasons to believe fraud might be involved. 

The role of a trustee in bankruptcy to make sure that all creditors are treated fairly and that any non-exempt qualities are sold for the most money, which is then distributed to the creditors appropriate to their claims. 

The United States Trustee who is an officer of the Department of Justice is responsible for appointing trustees.  There are no state agencies involved in a bankruptcy proceeding as all matters are handled through the federal bankruptcy courts. 

They will also participate in creditor meetings and has the power to discharge of debt if evidence of fraud or ineligibility is found with the creditor.  Also, any actions required by new bankruptcy laws regarding money management and budget planning are also reviewed by the trustee to insure the client is meeting all requirements.  Normally, the lawyers of bankruptcy work with the same trustees on various cases and know how the paperwork has to be filed to meet precise trustees’ concerns.  Any concerns with how the bankruptcy trustee handles a case must be left up to the attorney to get answered. 

The trustee’s role in bankruptcy will be different upon the kind of bankruptcy filed.  Whether Chapter 7, Chapter 13 or a Chapter 11 for businesses, his roles to determine the true value of any assets claimed and to protect the creditors from fraudulent claims, making sure they get a fair value of any assets.  While a Chapter 13 trustee’s role is more of an overseer, they will stay close to the case, representing clients to assure payments are received and distributed according to the court’s plan. 

Trustees for Chapter 7 filings typically serve a one-year term although those working with Chapter 13 filings may be standing trustees serving a geographic area or a court region.  Some clients may get confused with the role of a bankruptcy trustee and believe they're more interested in assisting creditors than ensuring the client gets a fair chance.  In most, for Chapter 7 bankruptcies there are few assets involved, however if there aren’t any, it is the trustee’s responsibilities to liquidate the qualities and distribute the money. 

With a Chapter 13 bankruptcy filing, the trustee’s job is more administrative as there are no assets to liquidate.  They will ensure the balances claimed to be owed by the client are right and have more approval power than the repayment plan.  The majority of attorneys will not file for Chapter 13 for a client if they don't have the means of meeting the payment obligations. 

The trustee will accept payments from the client and distribute them to the creditors consistent with the plan approved by the court.