A bankruptcy trust is a legal arrangement created to manage and distribute assets for the benefit of creditors when a company or individual files for bankruptcy. This trust is established to ensure that the available funds are allocated fairly among those owed money, following the rules set by bankruptcy laws. Typically, a bankruptcy trust is funded by the debtor's remaining assets, which may include cash, property, or other valuables. The trust is managed by a trustee, who is responsible for overseeing the distribution process and ensuring compliance with legal requirements, ultimately aiming to maximize returns for creditors like credit card companies and suppliers.