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How a Bankruptcy Trustee is Paid

In the bankruptcy law, it sets out the manner as to how a bankruptcy trustee is going to be paid for the case of administering a case. Payment methods, sources as well as compensation amounts differ based if you are in Chapter 7 or Chapter 13 of bankruptcy.

In Chapter 7 cases, the bankruptcy trustee will be paid in two ways, which depends if there are assets administered on your case or not.

The first one would be where the trustee gets a $60 administrative fee coming from the bankruptcy filing fees that you pay to the court clerk if you are going to file the case (based as of June 2018). The trustee is not going to get the administrative fee if the court waives on the filing fee.

The other one is through getting a percentage on the bankruptcy assets. This is where a commission will be acquired by the Chapter 7 trustee on bankruptcy assets sold for the creditors benefit. The trustee will get a portion of the profits. When there are no assets for the trustee to sell and that the trustee does not recover any money through the tax refunds, lawsuits or perhaps through other means, theres no fee paid to the trustee. The commission actually comes from the money which have been collected from the sale of the nonexempt assets or properties that is not protected from the sale by a bankruptcy exemption or perhaps the recoveries on lawsuits that were brought by the trustee.

When the trustee is going to collect assets in the case, makes payments to the creditors or sells them, the trustee will likewise get a commission on the money that were collected. The amount will however depend with the funds that were disbursed to parties that are interested. Theres no need for you to make extra payments to the court for you to cover the trustees commission in Chapter 7.

In order to get paid, the trustee should file an application for compensation to the bankruptcy court. All parties interested and creditors are going to get a notice with regards to the amounts which have been requested. If in case theres no one who will object or after the court holds a hearing about the objections that were filed, the court is going to review the fee on the application of the trustee and enters an order which will award the fees.

A Chapter 7 trustee also could recover costs on the expenses such as the professional accounting fees. Like the commissions, it only happens after the trustee is going to file a fee application as well as a request on the reimbursement costs and if this is going to get approved by the court after the notice from all the parties in the bankruptcy case.

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