About the United States Trustee Program

The United States Trustee Program is a litigating component of the Department of Justice whose mission is to promote the integrity and efficiency of the bankruptcy system for the benefit of all stakeholders — debtors, creditors and the public. Often described as the “watchdog of the bankruptcy system,” the USTP acts to prevent fraud, dishonesty, and overreaching in the bankruptcy system.

Background of the USTP

Congress established the USTP in 1978 as a pilot effort in 18 federal judicial districts. In 1986, Congress made the USTP permanent. The Program now covers all federal judicial districts except those in Alabama and North Carolina, where bankruptcy court officials called Bankruptcy Administrators perform a similar function. The USTP has standing to participate in every individual and business bankruptcy case in the 88 federal judicial districts under its jurisdiction, and on average it participates in more than 1 million active cases annually. This represents about half of all active cases annually in the federal judicial system.

The USTP consists of 21 regions with 89 field offices nationwide and an Executive Office in Washington, D.C. The USTP’s expansive field structure enables it to participate in about 250 bankruptcy courts, detect and address multijurisdictional violations through coordinated enforcement efforts, and ensure meaningful access to the bankruptcy system by both debtors and creditors.

Principal USTP Duties

The USTP has broad administrative, regulatory, and litigation and enforcement authority in the bankruptcy system. Its duties include:

Trustee oversight. The USTP appoints and supervises more than 1,000 private trustees to handle the day-to-day administration of cases under chapter 7 (liquidation), chapter 12 (debt adjustment for family farmers or family fishermen), and chapter 13 (debt adjustment for individuals with regular income). On average, these trustees distribute about $8 billion in assets annually.

The USTP also oversees the activities of about 250 private trustees who serve in small business cases under the streamlined procedures of subchapter V of chapter 11. Subchapter V trustees are appointed case by case to facilitate the development of a consensual plan of reorganization.

Oversight of credit counseling and debtor education providers. The USTP approves and monitors more than 200 credit counseling agencies and personal financial management providers who must meet statutory qualifications to offer required pre-bankruptcy counseling and pre-discharge education to individual debtors.

Civil enforcement. One of the USTP’s core functions is to combat bankruptcy fraud and abuse through civil enforcement. The USTP seeks civil remedies against debtors who engage in fraud or otherwise abuse the bankruptcy system. For example, the Program may take action to deny the bankruptcy discharge of a debtor who concealed assets, withheld information in bankruptcy documents, destroyed property to hinder or defraud a creditor or trustee, knowingly made a false oath, or refused to obey a court order. The USTP also seeks to protect consumer debtors, creditors, and the public. It pursues civil remedies against lawyers or other professionals who provide substandard representation or engage in other conduct that harms their clients; creditors who submit fraudulent claims; and bankruptcy petition preparers who make false promises to debtors, charge exorbitant rates, fail to make required disclosures, practice law without a license, or engage in other conduct prohibited under the Bankruptcy Code.

Criminal enforcement. The USTP refers matters that “relate to the occurrence of any action which may constitute a crime” to the United States Attorneys’ offices for investigation and prosecution. USTP staff assist in the investigation and prosecution of bankruptcy-related crimes, including serving as Special Assistant U.S. Attorneys, consulting on bankruptcy law, and testifying as expert, process, or fact witnesses. The USTP also partners with the U.S. Attorneys, the Federal Bureau of Investigation, and other law enforcement agencies by participating in bankruptcy fraud working groups and developing and presenting training programs. And the Program maintains a bankruptcy fraud hotline, offering a convenient means for individuals to report suspected bankruptcy crimes.

Facilitating access to justice. A critical component of the USTP’s mission is to ensure that all participants who comply with the Bankruptcy Code’s requirements receive the relief that the law affords them. Hurdles for individual debtors include getting the time off work to attend required proceedings, overcoming language barriers, and navigating procedural obstacles to a fresh start. The USTP has instituted virtual section 341 meetings, made interpreters available for individuals with limited English proficiency, and taken other initiatives that reflect its commitment to expanding access to the justice system.

Chapter 11 oversight. The USTP is responsible for supervising the administration of chapter 11 reorganizations. These cases present a wide array of issues and challenges, and the USTP has broad discretionary authority to take action to ensure the integrity of the chapter 11 process. The Program’s role in chapter 11 includes monitoring and commenting on matters such as applications for employment by professionals seeking to assist with the administration of the bankruptcy estate; professionals’ applications for compensation and reimbursement; and debtors’ plans of reorganization or liquidation and disclosure statements to creditors. Whenever possible, the USTP forms committees of creditors holding unsecured claims to facilitate creditor involvement in chapter 11 cases.

In addition to their specific statutory duties and responsibilities, U.S. Trustees “may raise and may appear and be heard on any issue in any case or proceeding” under the Bankruptcy Code. Because it is a neutral participant with no pecuniary interest in a case, the USTP helps provide stability to the bankruptcy system through its independence, balanced enforcement, and oversight. The USTP also is active in identifying and raising issues for review on appeal, thereby ensuring that the law is shaped, interpreted, and applied evenly in all judicial districts.

ADVISORY: The Department of Justice does not provide legal advice to individual members of the public. For specific bankruptcy-related advice, please consult qualified legal counsel. A list of private attorneys in your area may be available from your state bar association, local law schools, or legal aid clinics.