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.
For the Chapter 7 cases, a bankruptcy trustee will be paid in two ways, which however will depend if there are assets that are administered in your or not.
One of it is where the trustee will get a $60 administrative fee from the bankruptcy filing fees which you pay to the court clerk if you are going to file the case as of June 2018. The trustee will not get the administrative fee if the court waives 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 in this case is going to 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 will come from the money which were collected from selling the nonexempt assets or through recoveries on lawsuits that were brought by the trustee.
In case the trustee collects the assets of the case, sells it and makes payment to its creditors, the trustee will be able to get a commission based on the money thats been 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 interested creditors and parties will receive a notice about the amounts that were requested. If ever no one will object or perhaps after the court holds a hearing with regards to objections filed, the court will review the fee of the trustees application and will then enter an order that awards the fee.
A Chapter 7 trustee also could recover costs on the expenses such as the professional accounting fees. But just like the commission, it will only happen after the trustee is going to file a fee application as well as a request on the reimbursement of the costs and is going to be approved by the court after the notice to all parties who are in the bankruptcy case.