Why would Trustee's Payment Go Up?

[mel22nv]

So I'm in Middle FL BK Court, why would my Trustee payment go from $90, to $135 and this month shows $287.50? I mean she is paying my bills every other month but just curious as to why her payments continue to increase?

[sophieanne]

I didn’t know the answer and hopefully someone else might...but I’m wondering if you reviewed your confirmation document to see if there is any reason in it. I would also call your attorney to see if they can explain.

[sophieanne]

Or did I misunderstand what you’re writing? I’m thinking the amount you are having to give the trustee has increased...is that correct?

[mel22nv]

Hi sophieanne


Yes you were correct I was talking about the payment to the Trustee I just looked at the spreadsheet for my most recent modification and the payment to the Trustee did go up! So the total to the Trustee after my 5yr plan will be $14,437.50. Not complaining as I see that average out to about $240 each month but IMO thats $ that could have gone to pay creditors so do the Trustee get a salary as well? Whats their educational background? Is this bonus $? I guess I was in the wrong career when I did work! Lol maybe I should have tried my hand in being a Trustee!!!😁

[mel22nv]

BTW I looked up their salary max is at Level 5 Executive Schedule which in 2018 was $153,800 yearly. My 10% is commission! Not a bad salary to have a staff cut checks and mail out checks! Never found their educational background but legal for sure! Wish I had thought of this career back in the day!😁

[shipo]

My understanding is all Trustees have a Juris Doctorate (aka. JD) degree and were all admitted to the bar. I do not know if they ever needed to practice prior to becoming a Trustee, but I'm kind of betting they did/do.

[mel22nv]

Thanks shipo I kind of figured they had a JD. I often wish I had continued school but stopped at my Masters Degree since I was working in government at the time! Good info I'm always interested in others careers and what led them to that career!

[shipo]

Thanks [USER="53343"]Good info I'm always interested in others careers and what led them to that career!

LOL, that might be a great new topic in the https://www.bkforum.com/forum/news-general/general-talk section. :highfive:

[despritfreya]

BTW I looked up their salary max is at Level 5 Executive Schedule which in 2018 was $153,800 yearly. My 10% is commission! Not a bad salary to have a staff cut checks and mail out checks! Never found their educational background but legal for sure.

The Chapter 13 Trustee's percentage has nothing to do with the salary. The percentage is based upon the requirements of 28 U.S.C. § 586(e), which, as you know, gives them a salary not to exceed that of basic pay for level V as well as a percentage of funds actually disbursed, not to exceed 10%. This sounds great but that 10% is not lining their pockets or simply used to have staff cut and mail out checks.

Those funds are used to run the office, pay rent, employees (including staff attorneys), payroll taxes, unemployment compensation, workers compensation, utilities, insurance (including E&O and the required bonds) etc. At the end of the day, and considering how many Chapter 13s fail before being confirmed (no money if case is dismissed before confirmation), a number of trustees run the office at a loss as the percentage (which may not be 10%) is insufficient to cover expenses.

Further, there is no requirement that a standing trustee be an attorney. Many are. But many have accounting and business backgrounds and have not gone to law school.

Just FYI.

Des.

[mel22nv]

despritfreya thanks I did go back and read about the career and do understand that max salary I was just stating that my payment is in the 10% range! No slight was intended toward any Trustee or their office as I imagine their caseload and what they're staff do so if I came off that way not intended! I just did not pay attention to the increase now I know and understand; thanks everyone for all the info; and stay safe!

[justbroke]

BTW I looked up their salary max is at Level 5 Executive Schedule which in 2018 was $153,800 yearly. My 10% is commission! Not a bad salary to have a staff cut checks and mail out checks! Never found their educational background but legal for sure! Wish I had thought of this career back in the day!😁

Chapter 13 Trustees are attorneys or certified public accountants. Most are bankruptcy attorneys, but there is no requirement that they are attorneys. For a Chapter 13 Trustee, this is the only thing that they do... manage Chapter 13 cases. While they make 8-10% per case (on the payments they manage), they usually have a staff of at least 10-15 with as many as 3-5 attorneys on the staff. It sounds like a lot, but is a real business with office space, computer systems, and employees.

(Now I see that Des answered!)

[mel22nv]

despritfreya justbroke, thanks for the responses from you both I've learned a lot now but my days of working are over just was curious about their career path.

[justbroke]

despritfreya justbroke, thanks for the responses from you both I've learned a lot now but my days of working are over just was curious about their career path.

If you're a CPA, attorney, or certain other professional, it's possible to become a Chapter 13 Standing Trustee, but there are not a lot of these people.

From NACTT... "Currently, a little less than 200 Chapter 13 standing trustees serve in the 50 states and Puerto Rico."