Key Takeaways
- A bankruptcy trustee is appointed by the U.S. Trustee (a Department of Justice official), not the judge, to administer your case.
- A Chapter 7 trustee sells non-exempt property and pays creditors. A Chapter 13 trustee collects your plan payments and distributes them.
- The trustee is not neutral and not your lawyer. They act for the bankruptcy estate and creditors as a group, and cannot give you legal advice.
- You’ll meet the trustee once, at the 341 meeting of creditors, held by Zoom in Michigan. No judge attends.
- Chapter 7 trustee pay rises to a $120 base per case for cases filed on or after October 1, 2026; a Chapter 13 trustee’s fee is capped at 10% of plan payments.
A bankruptcy trustee is the person assigned to manage and oversee your case after you file. They are appointed by the U.S. Trustee Program, the Department of Justice office that supervises bankruptcy cases, not by the judge. What the trustee does depends on which chapter you file.
Understanding the trustee’s job removes a lot of the fear around filing. For most people, the trustee is simply the official who reviews the paperwork and runs one short meeting. Here is exactly who they are, what they do, and what they cannot do.
Who Appoints the Bankruptcy Trustee?
This is the most common point of confusion, so it is worth being precise: the court does not pick your trustee. In a Chapter 7 case, the U.S. Trustee appoints an impartial interim trustee from a panel of private trustees (11 U.S.C. § 701). In a Chapter 13 case, the U.S. Trustee appoints a standing trustee who handles every Chapter 13 case in an assigned area (§ 1302(a); 28 U.S.C. § 586(b)).[1] The bankruptcy judge stays out of day-to-day administration and only steps in to decide disputes.
What Does a Chapter 7 Trustee Do?
A Chapter 7 trustee’s core job is to turn your non-exempt property into money for creditors, and to make sure your paperwork is accurate. Their main duties are set out in 11 U.S.C. § 704.[2]
Reviewing Your Petition
The trustee checks your schedules, pay stubs, and tax returns against your assets and income, looking for anything missing or inaccurate. Most consumer Chapter 7 cases are “no-asset” cases, meaning there is nothing non-exempt to sell and creditors receive nothing.
Selling Non-Exempt Property
If you do own property that is not protected by an exemption, the trustee collects it, sells it, and distributes the proceeds to creditors under the priority rules of the Bankruptcy Code. Exempt property, the things you are allowed to keep for a fresh start, stays with you.
Objecting to Exemptions or Discharge
The trustee can object to exemptions you claim or, “if advisable,” oppose your discharge when there is a legal reason. The trustee can also undo certain pre-filing transfers (preferences and fraudulent transfers) to recover money for the estate. A judge, not the trustee, rules on any objection.
Running a Business With Court Approval
If your Chapter 7 includes a business, the trustee can operate it only when the court specifically authorizes it, and only for a limited period when doing so benefits creditors (11 U.S.C. § 721). The trustee is not there to be your business consultant.[4]
What Does a Chapter 13 Trustee Do?
A Chapter 13 trustee runs your repayment plan. They review the plan to confirm it meets the legal requirements, then act as the disbursing agent, collecting your monthly payments and distributing them to creditors (11 U.S.C. § 1302(b)). A Chapter 13 trustee may offer limited, non-legal help with keeping up with the plan (§ 1302(b)(4)), but they do not give legal advice and do not represent you.
Chapter 7 vs. Chapter 13 Trustee
| Chapter 7 trustee | Chapter 13 trustee | |
|---|---|---|
| Appointed by | U.S. Trustee, from a panel (interim trustee) | U.S. Trustee (standing trustee for the area) |
| Main job | Sell non-exempt property, pay creditors | Collect and distribute monthly plan payments |
| You interact | Mainly once, at the 341 meeting | At the 341 meeting, then monthly through the plan |
| How paid | $120 base per case (filed on/after Oct 1, 2026), plus a capped commission on funds paid out | A percentage of plan payments, capped at 10% |
What Happens at the 341 Meeting of Creditors?
For most filers, the 341 meeting is the only time they deal with the trustee face to face. It is run by the trustee, under oath, and no judge attends (11 U.S.C. § 341). The trustee asks a short set of routine questions to confirm your identity and that your paperwork is accurate. Creditors may attend but usually do not.[3]
- Timing: generally 21–40 days after filing in Chapter 7, and 21–50 days in Chapter 13 (FRBP 2003(a)).
- Bring: a government photo ID and proof of your Social Security number (FRBP 4002(b)).
- In Michigan: the U.S. Trustee’s Region 9 holds these meetings by Zoom video conference, so most filers attend from home or their lawyer’s office.
How Is a Bankruptcy Trustee Paid?
Trustees are not paid by you directly in the way a lawyer is. In Chapter 7, the trustee receives a base payment per case, which rises permanently to $120 for cases filed on or after October 1, 2026 (Bankruptcy Administration Improvement Act of 2025).[5] In an asset case, the trustee also earns a commission on money actually distributed to creditors, capped on a sliding scale by 11 U.S.C. § 326(a). In Chapter 13, the trustee is paid a percentage of the payments that flow through the plan, capped at 10% (28 U.S.C. § 586(e)).
What a Trustee Cannot Do for You
It is just as important to know the limits of the role. A trustee is not a neutral referee and is not your financial planner. They owe their duty to the bankruptcy estate and to creditors as a group, not to you. They cannot give you legal advice, cannot tell you which chapter to file, and do not decide disputes, that is the judge’s job. For advice on your own side, you need your own Michigan bankruptcy lawyer.
Working With a Trustee in Michigan
Detroit-area cases are filed in the U.S. Bankruptcy Court for the Eastern District of Michigan (Detroit, Flint, Bay City); the rest of the state files in the Western District. The Eastern District has several standing Chapter 13 trustees who split the caseload by division. Michigan also lets filers choose between state and federal exemption systems, which affects what a Chapter 7 trustee can reach, so the exemption choices you and your attorney make before filing shape how much, if anything, the trustee administers. For a walk-through of the full process, see our guide to the steps of Chapter 7 bankruptcy in Michigan.
Facing the 341 Meeting or Unsure About the Process?
Knowing what the trustee will and won’t do is half the battle, and you don’t have to walk into that meeting alone. Frego & Associates has guided Michigan families through bankruptcy for over 30 years, and the first conversation costs nothing.
Frequently Asked Questions
Do I have to meet the bankruptcy trustee?
Yes. You must attend the 341 meeting of creditors, where the trustee puts you under oath and asks routine questions about your paperwork and finances. It is usually short, and in Michigan it is held by Zoom. No judge attends, and in most cases creditors do not either.
How is a bankruptcy trustee paid?
In Chapter 7, the trustee receives a base payment per case (rising to $120 for cases filed on or after October 1, 2026) plus a commission on any money distributed to creditors, capped by 11 U.S.C. § 326(a). In Chapter 13, the trustee is paid a percentage of your plan payments, capped at 10%. You do not pay the trustee directly the way you pay your attorney.
Can the trustee take my house or car?
Only if there is non-exempt equity. A Chapter 7 trustee can sell property that is not protected by an exemption, but most consumer cases are “no-asset” cases where everything is exempt and nothing is sold. In Chapter 13, you keep your property and pay over time. Your exemption choices, made with your attorney before filing, decide what the trustee can reach.
Can a bankruptcy trustee investigate my financial transactions?
Yes. A trustee can review your past transactions to identify fraudulent activity or preferential transfers that can be reversed to benefit creditors. They can examine your records, question you at the 341 meeting, and bring lawsuits to recover improperly transferred assets.
What happens if the trustee suspects fraud or misconduct?
If a trustee suspects fraud, they can object to your discharge, refer the case to the U.S. Trustee Program for investigation, and file lawsuits to recover assets. Serious cases can be referred for criminal prosecution. Full, honest disclosure on your forms is always the safer path.
What is the difference between a Chapter 7 and a Chapter 13 trustee?
A Chapter 7 trustee liquidates non-exempt assets and distributes the proceeds to creditors. A Chapter 13 trustee oversees your repayment plan, collecting your monthly payments and distributing them to creditors over three to five years. Both are appointed by the U.S. Trustee, not the court.
Sources
- 11 U.S.C. § 701 (appointment of interim Chapter 7 trustee) and § 1302 (Chapter 13 trustee); 28 U.S.C. § 586 (U.S. Trustee appointment of standing trustees; 10% fee cap at § 586(e)). Legal Information Institute, Cornell Law School. § 701, § 1302, 28 U.S.C. § 586
- 11 U.S.C. § 704 (duties of a Chapter 7 trustee). law.cornell.edu/uscode/text/11/704 — see also U.S. Courts, Chapter 7 Bankruptcy Basics.
- 11 U.S.C. § 341 (meeting of creditors; no judge attends, § 341(c)); Fed. R. Bankr. P. 2003(a) (timing) and 4002(b) (identification). § 341; U.S. Trustee Region 9 (Michigan/Ohio) 341 meetings by Zoom.
- 11 U.S.C. § 721 (authority to operate the debtor’s business only with court authorization). law.cornell.edu/uscode/text/11/721
- U.S. Courts, “Bankruptcy Administration Improvement Act Chapter 7 Trustee Payments” — BAIA 2025 (Pub. L. 119-76, signed Feb. 6, 2026): Chapter 7 trustee compensation permanently increases to $120 for cases filed on or after Oct. 1, 2026. Commission caps at 11 U.S.C. § 326(a).
This article is general information about the role of a bankruptcy trustee, not legal advice, and reading it does not create an attorney-client relationship. Procedures and dollar amounts change; verify current details with a licensed attorney or the cited authorities. Last updated: October 6, 2026.
