What is a Bankruptcy Trustee?
There is a common misunderstanding about the differences between a Debtor’s Bankruptcy Attorney and the Trustee for his case, especially when a Debtor files a Chapter 13 Bankruptcy Case. The difference seems much easier to understand in a Chapter 7 Bankruptcy. The main thing to understand is the Trustee and the Bankruptcy Attorney are two separate people or entities, and the Attorney does not work for the Trustee and the Trustee does not work for the Attorney.
In a Chapter 7, most Debtors understand the Trustee is the person who conducts the 341 hearing and the Attorney is the person who prepares all the paperwork and gives them advice on filing the Bankruptcy. The Trustee is the person who decides that the Debtor either has no property to be distributed to the Creditors because it is all exempt or the Trustee will get any non-exempt property and distribute it to all the unsecured creditors.
The difference seems a little more confusing when a Debtor is in a Chapter 13. The Attorney will prepare all the paperwork and let the Debtor know what the Trustee payment will be. Many Debtors get confused and think the Trustee payment is going to the Attorney and the Attorney is the one distributing the money. That is not how it works. The Chapter 13 Trustee receives the money, distributes the money, sends out the wage directives, sends out the order to stop the wage directive, and gives the discharge order to the court.
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