How and why is a Trustee appointed to a Chapter 7 bankruptcy case?

After the bankruptcy petition is filed, the United States Trustee appoints as trustee a disinterested person who is a member of a panel of Chapter7 trustees ("panel trustee") to serve as an interim trustee.  The interim trustee serves until a permanent trustee is elected or designated at the Section 341 hearing.  If a trustee is not elected or designated at the Section 341 hearing, the interim trustee will then serve as the permanent trustee. 

In almost every case, the interim trustee will continue to serve as the permanent trustee.  A Panel Trustee is appointed in each Chapter 7 case to review the bankruptcy petition and schedules filed with the Court and to determine if the debtor has any non-exempt assets available for distribution to creditors.  The Panel Trustee is required to be independent and works primarily for the benefit of the debtor's unsecured creditors.

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