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First, because your mother has died, her estate has to go through probate. That's where the assets and debts will be sorted out and settled, with anything left going to heirs. I don't think a bankruptcy survives the death of the debtor.

The trustee has said that he would sign the bankruptcy over to myself and my husband because we are living in the house, but we would have to pay the full amount of the $1100.00. There really is no estate except for the house, we are trying to keep it rather than sell it to pay the creditors in her bankruptcy.

That sounds strange to me. My understanding is that your mother's estate would have to go through probate. Did your mother have an attorney for the bankruptcy? If so, see if you can consult with him/her for advice on this.

Some more thoughts on this. My understanding is that under most states' laws, when a person dies, the decedent's estate must go through probate, even if the "estate" is nothing more than the decedent's personal effects. If the decedent had a will, it must be filed and admitted by the probate court. If the decedent died intestate (no will), the state's laws govern how the estate is to be distributed. Also, there may be estate taxes to be paid. And at the moment of death the decedent's property became the property of the decedent's estate, not the property of the heirs or anyone else. The only way an heir can obtain clear title to a decedent's house or other property is after the probate process is complete.

I suspect the BK trustee either doesn't know much about probate law, or gave wrong info so he could keep the cash flowing his way.

You might want to get several legal opinions. Try Legal Aid, the local probate court, or a free consultation with an attorney.