Debtor
The individual or business entity filing for bankruptcy.
Creditor
Entities that have claims against against the debtor.
United States Trustee Program
The United States Trustee Program (“USTP”), a division of the United States Department of Justice (“USDOJ”), has United States Trustees (“UST”) assigned to one or more judicial districts. The USTP supervises the administration of bankruptcy cases and private trustees. The duties of the USTP are contained in 28 U.S.C. Sec. 586 and 11 U.S.C. Sec 101, esq. The UST reports to the Director of the USTP, who in turn, reports to the Attorney General of United States.
The USTP is a “a national program with broad administrative, regulatory, and litigation/enforcement authorities whose mission is to promote the integrity and efficiency of the bankruptcy system for the benefit of all stakeholders – debtors, creditors, and the public.” (U.S. Trustee Program ).
Chapter 7 Trustees
Chapter 7 Trustees (C7T) are known as “panel trustees” because they are appointed to a panel in each district. The C7T are assigned cases based on a blind rotation by the UST. The C7T “collects assets of the debtor that are not exempt under the Bankruptcy Code, liquidates the assets, and distributes the proceeds to creditors.”
The duties of a C7T duties are set-forth in 11 U.S.C. Sec. 704(a).
Chapter 12 and Chapter 13 Trustees
Chapter 12 and Chapter 13 Trustees (“C12T” and “C13T”) are known as “standing trustees.” They have standing appointment from the UST to administer cases within a certain geographic location. C12T and C13Ts “evaluate the financial affairs of the debtor, make recommendations to the court regarding confirmation of the debtor’s repayment plan, and administer the court-approved plan by collecting payments from the debtor and distributing funds to creditors.” (www.justice.gov/ustp under “Private Trustee Information”)
The Duties of a C13T are set-forth in 11 U.S.C. Sec. 1302(b).
Chapter 11 Trustees
Under certain circumstances, the Bankruptcy Court can appoint a Chapter 11 Trustee (C11T) “for cause” or where necessary to protect the rights of creditors or other interest holders. The appointment is made under section 1104 and requires notice and hearing. Cause includes dishonesty or incompetence by the Debtor-in-possession (“DIP,” the debtor/business filing for bankruptcy protection). The C11T takes the place of DIP in running the business.