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How Do I Become a Trustee in Bankruptcy?

Article Details
  • Written By: Autumn Rivers
  • Edited By: Angela B.
  • Last Modified Date: 22 August 2019
  • Copyright Protected:
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    Conjecture Corporation
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Becoming a trustee in bankruptcy usually requires that you have a college degree and, while any major is usually accepted, one involving law or accounting can offer an advantage in this field. You also typically need five or more years of experience working in a related industry, meaning that your work involves taxes, credit or legal issues. If you possess these qualities, your next step if you want to become a trustee in bankruptcy is to pass a credit check, criminal background check and drug screening. If you pass these tests and an interview, you then will need to be bonded to provide additional incentive to follow all the rules of bankruptcy. Once you complete these requirements, you may be assigned to a bankruptcy trustee panel when a spot is available.

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If you believe your college degree and at least five years of work experience make you suitable to become a trustee in bankruptcy, your first step is to submit an application and wait for a response. In most cases, the next step in continuing along this career path is to pass a background check, during which the police will take your fingerprints and look for a criminal record. Your credit history will be checked, and you must have a good score and a financial record that is free of bankruptcy for at least the past seven years. In addition, you can expect to take a drug test before you progress in your efforts to become a trustee in bankruptcy.

Once you pass these tests, you will need to become bonded. This means you need to post a cover bond so you are financially covered for more than the cost of each bankruptcy estate with which you will be working. The point of becoming bonded is so your employers know you will follow the bankruptcy rules, because you will lose the money in the bond if you do not. Once this is completed, you have to pass an interview to make sure your past experience, knowledge and code of ethics all make you suitable to become a trustee in bankruptcy.

After all of these steps, you may be offered a spot as a trustee, but only if there is a position available. This is often only a part-time job, and the amount you get paid per bankruptcy is not much. You can, however, make additional money when you are able to liquidate the debtor's assets so some of their creditors get paid. You can typically make a percentage of the amount of assets that you are able to locate and sell, which is why you are advised to become a trustee in bankruptcy only if you think you would be adept at collecting funds and distributing them among creditors.

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