---
kind: "section"
citation: "11 U.S.C. § 702"
title: "11"
title_heading: "Bankruptcy"
number: "702"
heading: "Election of trustee"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/11/702"
units:
  - "Chapter 7 — Liquidation"
  - "Subchapter I — Officers and Administration"
---

# §702. Election of trustee

- (a) A [creditor](/usc/11/101.md?p=10) may vote for a candidate for trustee only if such [creditor](/usc/11/101.md?p=10)—
  - (1) holds an allowable, undisputed, fixed, liquidated, unsecured [claim](/usc/11/101.md?p=5) of a kind entitled to distribution under section [726(a)(2)](/usc/11/726.md?p=a-2), [726(a)(3)](/usc/11/726.md?p=a-3), [726(a)(4)](/usc/11/726.md?p=a-4), [752(a)](/usc/11/752.md?p=a), [766(h)](/usc/11/766.md?p=h), or [766(i)](/usc/11/766.md?p=i) of this title;
  - (2) does not have an interest materially adverse, other than an equity interest that is not substantial in relation to such [creditor](/usc/11/101.md?p=10)’s interest as a [creditor](/usc/11/101.md?p=10), to the interest of [creditors](/usc/11/101.md?p=10) entitled to such distribution; and
  - (3) is not an [insider](/usc/11/101.md?p=31).
- (b) At the meeting of [creditors](/usc/11/101.md?p=10) held under [section 341 of this title](/usc/11/341.md), [creditors](/usc/11/101.md?p=10) may elect one [person](/usc/11/101.md?p=41) to serve as trustee in the case if election of a trustee is requested by [creditors](/usc/11/101.md?p=10) that may vote under [subsection (a)](#a) of this section, and that hold at least 20 percent in amount of the [claims](/usc/11/101.md?p=5) specified in [subsection (a)(1)](#a-1) of this section that are held by [creditors](/usc/11/101.md?p=10) that may vote under [subsection (a)](#a) of this section.
- (c) A candidate for trustee is elected trustee if—
  - (1) [creditors](/usc/11/101.md?p=10) holding at least 20 percent in amount of the [claims](/usc/11/101.md?p=5) of a kind specified in [subsection (a)(1)](#a-1) of this section that are held by [creditors](/usc/11/101.md?p=10) that may vote under [subsection (a)](#a) of this section vote; and
  - (2) such candidate receives the votes of [creditors](/usc/11/101.md?p=10) holding a majority in amount of [claims](/usc/11/101.md?p=5) specified in [subsection (a)(1)](#a-1) of this section that are held by [creditors](/usc/11/101.md?p=10) that vote for a trustee.
- (d) If a trustee is not elected under this section, then the interim trustee shall serve as trustee in the case.

## Source credit

(Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2604; Pub. L. 97–222, § 7, July 27, 1982, 96 Stat. 237; Pub. L. 98–353, title III, § 472, July 10, 1984, 98 Stat. 380.)

## Notes

### Historical and Revision Notes

### legislative statements

The House amendment adopts section 702(a)(2) of the Senate amendment. An insubstantial equity interest does not disqualify a creditor from voting for a candidate for trustee.

### senate report no. 95–989

Subsection (a) of this section specifies which creditors may vote for a trustee. Only a creditor that holds an allowable, undisputed, fixed, liquidated, unsecured claim that is not entitled to priority, that does not have an interest materially adverse to the interest of general unsecured creditors, and that is not an insider may vote for a trustee. The phrase “materially adverse” is currently used in the Rules of Bankruptcy Procedure, rule 207(d). The application of the standard requires a balancing of various factors, such as the nature of the adversity. A creditor with a very small equity position would not be excluded from voting solely because he holds a small equity in the debtor. The Rules of Bankruptcy Procedure also currently provide for temporary allowance of claims, and will continue to do so for the purposes of determining who is eligible to vote under this provision.

Subsection (b) permits creditors at the meeting of creditors to elect one person to serve as trustee in the case. Creditors holding at least 20 percent in amount of the claims specified in the preceding paragraph must request election before creditors may elect a trustee. Subsection (c) specifies that a candidate for trustee is elected trustee if creditors holding at least 20 percent in amount of those claims actually vote, and if the candidate receives a majority in amount of votes actually cast.

Subsection (d) specifies that if a trustee is not elected, then the interim trustee becomes the permanent trustee and serves in the case permanently.

### Editorial Notes

### Amendments

1984—Subsec. (b). Pub. L. 98–353, § 472(a), inserted “held” after “meeting of creditors”.

Subsec. (c)(1). Pub. L. 98–353, § 472(b)(1), inserted “of a kind” after “claims”.

Subsec. (c)(2). Pub. L. 98–353, § 472(b)(2), substituted “for a trustee” for “for trustee”.

Subsec. (d). Pub. L. 98–353, § 472(c), substituted “this section” for “subsection (c) of this section”.

1982—Subsec. (a)(1). Pub. L. 97–222 substituted “726(a)(4), 752(a), 766(h), or 766(i)” for “or 726(a)(4)”.

### Statutory Notes and Related Subsidiaries

### Effective Date of 1984 Amendment

Amendment by Pub. L. 98–353 effective with respect to cases filed 90 days after July 10, 1984, see section 552(a) of Pub. L. 98–353, set out as a note under section 101 of this title.