Both receivers and trustees are involved in bankruptcy, but only certain types. Receivership is both a feature of Chapter 11 bankruptcy, which is used for reorganization of a business entity under the United States bankruptcy laws, as well as a reorganization of a company under State law. Receivership may also occur when a governing body decides that an organization needs up close supervision of their affairs. Chapters 7, which is utilized for liquidation, and 13, which allows for reorganization of financial affairs by an individual, involve a trustee instead of a receiver, however.
Both the receiver and trustee are court appointed, but the receiver is more involved in asset management and reorganization than the bankruptcy trustee is in either Chapter 7 or 13. The receiver’s goal is to guide the company out of bankruptcy while protecting the assets of creditors and policyholders simultaneously. The receiver may use his or her authority to have the entity sell itself or merge with a solvent company to alleviate the bankruptcy. With banks specifically, the receiver’s goal is to protect account holders and investors if the bank fails, while continuing to allow deposits, withdrawals, and loans.
Whatever the receiver recommends, however, the court has final approval over the receiver’s plans and whether they are enacted.
When someone invokes Chapter 7 or 13 bankruptcies, however, a bankruptcy trustee is involved instead of a receiver. In Chapter 7, the trustee has to round up all of the debtor’s property, sell the bankruptcy estate’s property, challenge creditor claims where appropriate, distribute proceeds to creditors, and object to bankruptcy discharge where appropriate. In Chapter 13, however, the trustee’s goals are different. He/She has to review the individual debtor’s repayment plan, make objections to the plan when necessary, receive payments from the debtor according to the plan, and distribute payments to appropriate creditors. Learn more about receivers versus trustees in bankruptcy.
Whether a receiver or trustee, however, the court may require you to purchase a surety bond to secure the receiver or trustee’s obligations according to applicable law and to protect the beneficiaries of the Chapter 7 or 13 bankruptcy estate.
But where can you easily purchase a receiver or trustee surety bond?
Colonial Surety offers the direct and digital way to obtain receiver surety bonds or trustee surety bonds. We are the insurance company — which means no agent, no broker, and no middleman. We make it easy to obtain your court bond instantly. The steps are easy — get a quote online, fill out your information, satisfy underwriting requirements, and enter your payment method. Print or e-file your bond from your office. It’s that simple!