What is a Bankruptcy Trustee in Arizona?

what is a bankruptcy trustee

What is a Bankruptcy Trustee in Arizona?

When you file for bankruptcy, you will be assigned a court-appointed trustee. The trustee is not your representative, but a representative of the government whose job is to make sure that there is no fraud being committed. They are also in charge of reviewing your debt and the interest of the creditors, all while remaining neutral. What does it take to become a court-appointed bankruptcy trustee in the state of Arizona?

The United States Trustee Program

The bankruptcy courts are a part of a larger federal picture. The very top of the trustee food chain resides within the United States Department of Justice, who created the United States Trustee Program to oversee bankruptcy proceedings. The use of private trustees within bankruptcy proceedings helps with the administration, regulations, litigation, and enforcement during such proceedings. The program consists of one Executive Office in Washington, DC, along with 21 regions and 92 field offices across the nation.

Becoming a Trustee

A trustee is a neutral party that offers protection for both the creditor and the debtor in a bankruptcy case. The trustee may end up having multiple roles within a bankruptcy proceeding, dependant upon the filing the debtor is requesting. Trustees are either paid a flat rate for their services, or they receive a percentage of the funds that they distribute for a debtor each month.

Qualifications of a Trustee

The qualifications that the Department of Justice looks for in a trustee are established administrative, financial, and interpersonal skills. It is helpful if the trustee candidate has experience working with bankruptcy, but it is not a requirement. The trustee will only be able to serve in the area that they live in.

Candidates have to pass a background check which will include fingerprints, credit history review, and verification from the IRS that your tax payments are in good standing. The candidate must also qualify to be bonded. Bonds are specialized insurance against the possibility that the trustee will embezzle the funds they are in charge of. Bonding companies are unlikely to cover a trustee who doesn’t have a solid credit history and clean criminal background.


A bankruptcy trustee may only serve one type of bankruptcy and must choose a specialization. The most common types that trustees will have to choose from are Chapter 7, Chapter 12, and Chapter 13. Depending on the type of bankruptcy filed, the trustee may have different responsibilities and several cases.

Chapter 7 trustees will end up serving many cases over their career as a trustee. The Chapter 7 process is the quicker of the three bankruptcies. The debt in Chapter 7 is discharged, and real property is usually limited, making the trustee’s job limited in these filings.

Chapter 12 bankruptcy is a restructuring to allow for self-supported farmers and fishermen to repay all or part of their debts. The process of repayment is generally over a three- to five-year period of time. During this time, the trustee will be in charge of distributing the payments made on the case.

A trustee in a Chapter 13 bankruptcy works in the same way a Chapter 12 does. The debt in Chapter 13 is restructured to be paid on for a period of three to five years. The trustee will be the one in charge of the restructuring and payment distribution for this time.

Applications Process

To apply as a bankruptcy trustee, you will need to submit your resume to the district office of the United States Trustee Program in your area. Vacancies in positions can be found online through the program’s website. The program will fill vacancies periodically but are listed on the site when available.

Alabama and North Carolina do not fall under the jurisdiction of the United States Trustee Program. To apply for trustee positions in these states, you will need to apply through the Bankruptcy Administrator in the district.

Hiring Bankruptcy Counsel

If you are thinking of filing a bankruptcy in the state of Arizona, you need to hire a bankruptcy attorney who is skilled in the process of Arizona bankruptcy proceedings. A legal professional can help keep your case on track and help you protect your assets during a bankruptcy.