Erie, PA asked in Bankruptcy for Pennsylvania

Q: Do bankruptcy trustees work for the government?

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1 Lawyer Answer
W. J. Winterstein Jr.
W. J. Winterstein Jr.
  • Bankruptcy Lawyer
  • Boyertown, PA
  • Licensed in Pennsylvania

A: There are different kinds of "trustees" in the bankruptcy world. First, there is the U.S. Trustee, one of which is appointed in each federal court district, and that trustee performs several of the "administrative" functions formerly done by the bankruptcy judges. Among those is the assignment of Chapter Trustees to each new Chapter 7 bankruptcy case that is filed. In addition, each federal district has at least one "Standing Ch. 13 Trustee" (the Eastern District of Pennsylvania has two Ch. 13 Trustees, one in Philadelphia and one in Reading). The Ch. 7 and Ch. 13 Trustees have reporting obligations to the U.S. Trustee, who oversees the other Trustees to ensure the integrity of the bankruptcy process.

The U.S. Trustee's office is a political appointment. The Ch. 7 and Ch. 13 trustees are vetted and approved by the federal Administrator of the Courts in Washington, D.C.

The U.S. Trustee can be said to "work for the government". The Ch. 7 and Ch. 13 Trustees are independent of the federal government, and are paid from "commissions" in the cases to which they are assigned.

David Earl Phillips agrees with this answer

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