Texas Bankruptcy
Laws & Lawyers 		Define: Texas Chapter 11 Trustee
Texas Bankruptcy Law Summaries

"Texas Chapter 11 Trustee"

A Chapter 11 trustee is not required initially when the case is filed voluntarily. In voluntary cases, the debtor retains possession of all assets and is allowed to continue business operations as a debtor-in-possession. However, if an objection is filed by any creditor, or upon the courts own motion, a trustee may be selected by the court to replace the debtor. Generally, the appointment of a trustee in Texas bankruptcy cases under Chapter 11 signals legal non-compliance or the debtor's failure to act in good faith. Texas Chapter 11 trustees almost always retain legal counsel to assist in comprehensive filing requirements.

11 U.S.C. §1104(a): "At any time after the commencement of the case but before confirmation of a plan, on request of a party in interest or the United States trustee, and after notice and a hearing, the court shall order the appointment of a trustee - (1) for cause, including fraud, dishonesty, incompetence, or gross mismanagement of the affairs of the debtor by current management, either before or after the commencement of the case, or similar cause, but not including the number of holders of securities of the debtor or the amount of assets or liabilities of the debtor; or (2) if such appointment is in the interests of creditors, any equity security holders, and other interests of the estate, without regard to the number of holders of securities of the debtor or the amount of assets or liabilities of the debtor."

Words and phrases used by the court are frequently terms of legal art. In practice, legal terms convey an assortment of requirements for compliance, according to case law, statutes and rules. Although the common usage of a word or phrase may be clear to an average person, legal terminology easily snares unaware pro se debtors because of the complexity of bankruptcy laws. Also be aware, attorneys representing creditors readily sense a pro se debtor's apprehension, and test their knowledge, confidence and compliance. For this this reason, pro se debtors must become their own best advocate, and be capable of defending their right to debt relief according to current laws.

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