What is a Trustee in Bankruptcy?

A trustee in bankruptcy is effectively an officer of the court who plays an important role in the administration of estates.

Bankruptcy Trustees also have legal obligations that are set out in the Bankruptcy Act 1966. This includes investigating issues to do with estates and to perform certain tasks in that regard. These obligations are to both the bankrupt and to creditors.

In the process of carrying out their duties, trustees in bankruptcy are required to keep records and accounts. They also have to demonstrate proper handling of money and to provide support to the Inspector General during investigations.

To become a trustee, an individual must apply to the Inspector General and must demonstrate the required knowledge, skills, qualifications and experience to effectively carry out the important duties of the role.

In summary, this includes:

  • > Knowledge of the legal responsibilities of trustees and the powers entrusted to them through bankruptcy legislation;
  • > Knowledge of business and commercial law;
  • > Ethical responsibilities and how to deal with these;
  • > Knowledge skills and abilities to operate a business and to assess the viability of bankrupt’s businesses; and
  • > Suitable communication, negotiation, advocacy and judgment skills.


To do this, an applicant will be required to provide a written statement of their suitability. The application will be reviewed by a special committee (which includes the Inspector General), which includes, amongst other things, an interview with the applicant, review of previous experience and checks with at least two referees.

The committee may require the applicant to undertake a written examination.

Where employees lodge applications, they will need to demonstrate their independence and freedom to carry out the duties of the role without influence of the employer.

In summary, the Trustee in bankruptcy is an officer of the court who plays an important role in the administration of estates and who must demonstrate the requisite knowledge, skills and abilities to be able to do so effectively before being appointed.