Why does the trustee in our Chapter 7 bankruptcy get a percentage of our inheritance?
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Why does the trustee in our Chapter 7 bankruptcy get a percentage of our inheritance?
We received an inheritance within the 180 period of our bankruptcy. I contacted my lawyer right away and told him of the inheritance. He said fine, let me know when you receive a check. Well the check came so I called him and said lets repay our creditors. He asked the amount of the check and then he spoke with the trustee. He called last night and told us that we would have to not only turn the entire check over to the Trustee but that they were going to take a sizable percentage. We are in shock. The trustee already charged us $280 to re-open the bankruptcy. How much can they take, how long do they keep our money, and why do they get a percentage? We were following the law and willing to pay back every cent to our creditors. Isn’t this enough?
Asked on November 17, 2010 under Bankruptcy Law, New Hampshire
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
Yes, it is certainly can be shocking but the truth of the matter is that the fees awarded to theTrustee are done so under the Bankruptcy Code and they can certainly be steep in some instances. They are awarded a portion of the filing fee and they are awarded a percentage of assets that are liquidated as a "trustee commission" on a sliding scale basis: 25% of the first $5,000; 10% of the next $45,000; 5% of the next $950,000; and 3% of the balance. Finally, they are entitled to be paid for any legal services that they perform in order to collect and liquidate assets. Ask for an accounting if you believe that something is not right. Good luck.
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