A bankruptcy trustee is given control of a debtor's assets when a person declares bankruptcy.
After a debtor decides to declare bankruptcy and has been ordered bankrupt by the court, the trustee is in charge of their estate.
What does a bankruptcy trustee do?
The bankruptcy trustee is responsible for collecting all assets of a debtor who has declared bankruptcy. After that's done, the proceeds are divided between creditors.
The trustee also takes over any papers, books and other records which relate to the debtors financial affairs.
All of the debtor's property is included in this estate, but some items, like tools, books, furniture and kitchen equipment are left out to ensure the bankrupt has basic domestic needs.
The trustee also has the ability to research events that have taken place prior to bankruptcy, such as excessive pension contributions before declaring bankruptcy.
Weighing all your options
A trustee in bankruptcy is appointed by a court, and holds property in trust for creditors, not the bankrupt.
To avoid your possessions being held by a trustee, weigh all your options carefully before deciding to declare bankruptcy.
Other services available to those in financial trouble are IVA's, debt management programmes, and debt services that give advice. Bankruptcy should be a last resort, though for many who are deeply afflicted by debt, it's the only choice.
Call Legal Advice Helpline on 0800 612 3042 for more debt information.