A bankruptcy trustee is a court-appointed neutral party who oversees a bankruptcy case. Their job: review the debtor's finances, sell non-exempt assets, investigate potential fraud, and distribute the proceeds fairly among creditors.
In the US, Chapter 7 bankruptcy trustees liquidate a debtor's assets. Chapter 13 trustees manage repayment plans. They have significant power — they can reverse fraudulent transfers (like a debtor hiding assets by gifting them to friends), question the debtor under oath, and challenge suspicious claims by creditors.
Bankruptcy trustees are typically lawyers or accountants with specialized training. They earn fees from the bankruptcy estate — usually a percentage of the assets they administer. The US Trustee Program (part of the Department of Justice) supervises all bankruptcy trustees to ensure fairness.