Tell me about Trustee's fees

[UpsideDown]

How do they determine the amount of Trustee's fees and how is it paid?

Say for example, after calculating my expenses I have $200/mo. DMI. I propose a plan to pay $200/mo. for 60 months. Does the Trustee just take his cut out of this with the remainder going to unsecured creditors? He can't charge me fees over and above the $200/mo. because I don't have it, right?

[liz417]

That's correct, your Trustee's fees will come out first, then your creditors will take whats left. In our District our Trustee fees are 10%.

[Flamingo]

The Trustee's fee is a percentage of your Plan total (determined by district) and can be quite a bit of money if you are paying back a lot over 5 years. Our trustee's fee was 9% and it was 9% of the total amount spread out over 60 months.

[lrprn]

Here's the link that shows by state bk district what the Ch 13 trustee's fee will be after October 2008 - http://www.usdoj.gov/ust/eo/bapcpa/2...3_exp_mult.htm

As Flamingo explained, your trustee's administrative fee will be a part of every Ch 13 payment you make through to the last payment. Our bk district charges a 10% trustee fee as well.

These %s are set by bk district. Trustees have to use the % that is defined by their bk court district.

[UpsideDown]

OK....it's 7.5% for my district but I guess it really doesn't matter what the rate is because "I'm" not paying it; I'm paying the same amount regardless. The unsecured creditors just get 7.5% less, right?

It could be 100%; that would just mean the creditors get 0 and the trustee get's it all....correct?

Just trying to make sure I understand it.

[woeisme]

yep, that's how it is.

[lrprn]

OK....it's 7.5% for my district but I guess it really doesn't matter what the rate is because "I'm" not paying it; I'm paying the same amount regardless. The unsecured creditors just get 7.5% less, right?

Right.

Here's how it works....take a look at the current Ch 13 filing form B22C at http://www.uscourts.gov/rules/BK_For...22C_0108v2.pdf

Scroll to Line 50 in Subpart C: Deductions for Debt Payment. This is where the trustee fee % is inserted and the trustee's monthly administrative fee is calculated.

The trustee's monthly admin fee is treated just like another secured debt because it is paid out as a part of every one of your Ch 13 payments. If your trustee takes 10% and your monthly payment is $1200, then your trustee is going to get $120 every month.

The $120/month trustee fee is added in as a part of all the income deductions you are allowed, thus reducing the total disposable income available to pay your non-secured creditors. In this example, your non-secured creditors will get $120/month less returned to them over the life of your Ch 13 because that's how your trustee earns his/her living

Make sense?

[bcvw]

Let me see if understand this according to my own payment plan that was just submitted.

My DMI was calculated at 1527.50/mo. 1527.50*12months = 18330 per year. Every two weeks I have the payment deducted from my check. 18330/26 pay periods - $705 per pay period.

My payment plan shows $755.

I asked the attorney why and he said it is to cover the trustee and attorney fees. Trustee fee is 7% here. 705 * 1.07 (7%) = 754.35 ($755).

Does that sound right that the trustee fee is ADDED to my DMI? I see where that amount was deducted on line 50 so it seems it is right.

[UpsideDown]

Hey thanks guys, that clears it up.