Punishable Conduct

• The U.S. Bankruptcy Code is vague regarding what sort of conduct would justify replacing a trustee. According to a February 2011 decision by a judge for the Northern District of Iowa, Section 324(a) of the Code says only that you can replace a trustee for "cause." The judge deciding the case is responsible for deciding what might constitute "cause." Generally, conduct that qualifies includes a previous, undisclosed relationship with one of your creditors, or if she sells off your property in such a way as to potentially pocket the money herself.
  
  

The Trustee's Supervisor

• The U.S. Trustee Program supervises all Chapter 7 trustees. They're not at liberty to take any action without the possibility of review, and trustees are not generally willing to take the chance of committing an obvious wrongdoing: The repercussions are too severe. The court would remove him as trustee of not only your bankruptcy case but all other cases he is handling as well. Attorneys can sometimes withstand ethics complaints, but a trustee's career would effectively be over.
  
  

What to Do

• If you believe your trustee is guilty of misconduct, speak with your attorney about your concerns. If you don't have an attorney, consult with one so you have a full understanding of how likely it is that the court will uphold your complaint. If you want to proceed with making a complaint on your own without an attorney's assistance, write a comprehensive letter detailing the trustee's transgressions and submit it to the Criminal Enforcement Unit in Washington, D.C. The Criminal Enforcement Unit is part of the U.S. Trustee Program. Your letter can't just include allegations; you should also supply documented proof.
  
  

Warning

• The bankruptcy court will generally err on the side of favoring the trustee if you bring an action against her for replacement. Even if the Criminal Enforcement Unit agrees that you have a case, you would need to file a motion with the court to actually have the trustee removed. The process will include court appearances, and you'll need a professional attorney to argue your case for you if you're going to be successful. If you're not successful, the U.S. Bankruptcy Court allows the accused trustee to reimburse herself for any legal fees she incurs in defending herself from your bankrupt estate and from the sale of your assets.