16 Mar How To Keep Your Chapter 7 Trustee Happy.
When you file a Chapter 7 bankruptcy, a trustee is appointed to oversee the process, make sure you have listed all of your assets and debts, and distribute any property of the estate to the unsecured creditors. Understanding what they do can make the process easier.
First of all, it’s important to know how the trustee gets paid. Part of your filing fee goes to the trustee to review the paperwork you filed and conduct the meeting of creditors that you have to attend. For that review the trustee receives $60.00 – not much considering the things she has to look at. These include the papers you filed, your pay stubs, bank accounts and tax returns for starters. Then there might be property to appraise or examine retirement accounts or pension funds to look at.
Once the review process and the meeting of creditors is over, the trustee will make a decision as whether your case has any non-exempt assets to distribute to the unsecured creditors. If there are no assets, the trustee will file a Notice of No Assets and conclude the case. She keeps the $60 and moves on to the next matter.
If however, there are assets to be distributed, the trustee must sell them and then, after paying her expenses, will distribute them to the unsecured creditors. From any assets of the estate, the trustee gets an additional fee. This is a floating scale based on the value of the property. Subject to court approval, the trustee gets a maximum of 25% of the first $5,000; 10% of the next $45,000; 5% of the next $950,000; and 3% of anything over that. Thus, it puts money in the trustee’s pocket if there are non-exempt assets.
So, if you have an easy, no asset case, get the trustee the papers she needs to look at well in advance of the meeting of creditors. The meeting will go much quicker and easier because she will have already had a chance to see everything and will have determined if it is an asset case or not. She is also much less likely to get picky over the value of a piece of your property if you are cooperative.
If you have non-exempt assets, get the trustee any documentation as to their value. At that point you can often negotiate a buy back from the bankruptcy estate so you won’t lose the asset.
Latest posts by Douglas Jacobs, Esq. (see all)
- STUFF YOU KEEP IN BANKRUPTCY - January 31, 2016
- Bankruptcy And The Elderly - April 11, 2014
- Four Steps to a Successful Chapter 7 bankruptcy - March 11, 2014
- Thinking About Filing Bankruptcy? Now Might be the Right Time. - February 11, 2014
- The Debt and the Lien: Two Completely Different Problems - January 11, 2014