How a Trustee Relates to Filing Bankruptcy

The trustee is an individual, but may be an entity, that is appointed by the bankruptcy court to administer the bankrupt debtor’s bankruptcy estate.  In some bankruptcy cases the trustee would be responsible to take control of all of the debtor’s non-exempt property in the bankruptcy estate and to sell or liquidate any property and to pay the debtor’s creditors from the proceeds of the sale of the assets.  In other bankruptcy cases the trustee would receive the debtor’s payment as per the monthly repayment plan and to then distribute the funds to the debtor’s creditors.  The trustee is required to apply the U.S. bankruptcy laws and assure that both the rights of the debtor and the creditors are provided as provided by bankruptcy law. 

Debtors Be on Notice! 

The trustee does not primarily represent the interests of the debtor or the interests of the creditors although she may at times act as conciliator between them.  In fact, the trustee may have a significant personal monetary interest in the bankruptcy based on her case related fees.  She is allowed to charge the debtor in connection with creditor debt repayment.  The greater the debt repayment amounts the trustee is able to successfully funnel to creditors the greater the fees she can charge the bankruptcy estate.  Some bankruptcy courts have “standing trustees” available for all bankruptcies out of that particular court while other courts have trustees that are appointed on a rotating basis from a panel of available bankruptcy trustees.

Trustee Fees

In certain bankruptcy cases the trustee gets paid a general fee of sixty dollars, in others the bankruptcy court judge may waive the trustee’s fee, however, in all bankruptcies the trustee is entitled to take a percent of the funds the debtor pays to her to pay the creditors.  The trustee can take twenty five percent of the first five thousand of the debtors funds earmarked for creditor payment; the trustee can take ten percent of the next forty five thousand dollars of the debtor’s funds intended for creditor payment and so on.  This is called a ‘trustee statutory commission” or fee paid out of the debtor’s assets prior to payment to the creditor.  Of every hundred dollars paid in to the trustee for creditors only ninety or less would go to payment of the debts.

Getting Legal Help

If you or a member of your family has been forced to file a federal bankruptcy action and you would like to have the assistance of experienced counsel to protect your interests and rights instead of relying on a court appointed trustee to answer your questions then all you need to do is contact a bankruptcy lawyer in your area.