Excessive Trustee Fee?

[D19S59J]

I am in the final months of a 5-year 100% plan. It is expected to be completed by the end of July. I filed pro se. The trustee fee for my district when I filed was 5.4%. However, the average fee so far has been about 6.5% and over the past few months the trustee has been taking 10%. At this rate, the trustee will have collected about $2,000 more than what the plan should have allowed. Has anyone heard of this happening? If so, is the excess refunded, or better yet, applied to the debt resulting in the plan being completed earlier? Thanks.

[justbroke]

The Trustees are allowed to rake from your payments 10%. This is because the fee fluctuates during the lifespan of a Chapter 13 plan. Generally the Trustees will kick back any overpayment to the unsecured creditors. At least that's what is authorized and is done in Region 21 of the Executive Office of the United States Trustee. It's easier than adjusting the percentage every year. A Chapter 13 Standing Trustee could be affected by the number of cases in the district so one year it could be 10% (not enough cases) and the next 4% (many cases).

So, it happens all the time. In my district they collect a straight 10%. It appears that your Standing Trustee is adjusting over time and not using a fixed value. If you're in the Eastern District for WA then your fee should have been a whopping 8.4% over the last 2 years.

As an example, look at Pennsylvania. They vary every 6 months and look how varied the fees are; they go from 2.90% to 7.90% over time. I would venture to guess that your district is similar in that it fluctuates. The reason for this is that the Chapter 13 Standing Trustee's office is funded by the collection of fees.

https://www.pawb.uscourts.gov/chapter-13-trustee-percentage-fee

[D19S59J]

Thanks for the reply. So the fee can vary over the course of the plan and isn't fixed at the rate when you filed? Here in the Western District of Washington, it's currently 6% and has been for a while. It's never been higher than that, and is usually between 5.4% and 6% when I look at past figures.

[justbroke]

Here, in my district, they just fix it at 10%. As I wrote, it appears the Pennsylvania District changes it every six months. I like the flat rate better since I know it's 10% all the time. The fee can definitely vary and I am sure that it is tied to how much business the individual Chapter 13 Standing is making on their cases. Remember, they are paid from the fees and they personally can't make more than a Level V Executive in the federal government, which is $180K per year (2024). If the fees are not covering their office expense and their salary, then they increase the rate. The maximum is 10% by law.

You can always complain to the Executive Office of the United States Trustee (EOUST) for Region 18 (your area). The EOUST Region 18 will likely say the same thing. The Standing Trustee is paid from fees and if the percentage isn't enough the EOUST raises the percentage. It may have just been increased. I can't tell because, unlike Pennsylvania, your region doesn't appear to publish the fees in a nice neat and convenient format showing the historical values.