Trustee Fees

[em96]

I never thought about this before, but am I to assume the Chap 13 trustee charges a fee for his services? I am 13 months into my 5 year plan. A couple of months ago I started checking my account on 13datacenter.com and I noticed that $130 from every payment is not accounted for. Each payment is dispersed to my normal monthly mortgage payment, my mortgage arrears, and my attorney, but there is always that $130 that is not accounted for. If this is what he charges, why wouldn't it be listed on my account? Should I be concerned about this? My 13 payment every month is around $2700.

[IamOld]

Yes there are fees...in my district it's 10% of whatever he pays each month.

[frogger]

Sort of, however your wording/thinking is a little off. The trustee does not "charge a fee" as such, the trustee is entitled to a fee by law. He/She is not skimming off the top.

[oicu812]

where I am from thats called skimming dems fancy edumacated big city lawyers can make up big fancy words for everything [said in my best southern accent]

[HHM]

The trustee skims from the creditors, not the debtor. The trustee fee does not affect your monthly payment, it simply affects how much your creditors actually recieve.

[justbroke]

Exactly! The Trustee fee comes from the disposable monthly income that would otherwise go to the unsecured creditors. They are not skimming anything from the debtor! The higher the Trustee fees, the less the unsecured debtors get from the disposable monthly income. The Trustee is limited based on the jurisdiction. The Trustee fees range from 4% to 10% maximum of the amounts that the Trustee handles during the Chapter 13.

[forgotten]

Well, if you are in a 100% you do pay the fee. But in that case think of it as a "creditors not calling me, bank not foreclosing, wages not being garnished, IRS not levying my bank account, being out of debt in 3-5 years 0% APR super plan fee". Heck of a name!

[justbroke]

Yes, there are some circumstances where the Trustee fee would come out of your pocket. However, you put it correctly forgotten. It's like refinancing with a consolidation loan at 0% interest for 3-5 years! (You could also end up paying some or all of the fee if you don't have enough disposable income to pay the Trustee fees on your secured debt. That was exactly my case. I had no DMI so the Trustee fee of almost $700/month came from my expense budget.)

[mountanddo]

Well, with my DMI being $150/month for 36 months and my attorney getting $2500 then out of the $2900 left I'm assuming that the trustee is going to be getting most, if not all of that. So basically, the attorney and trustee is going to get paid and the creditors will get nothing? I owe the IRS $400 for 2009 taxes which my attorney said I could put in my plan, however I thought I read somewhere that if IRS taxes are not more than 4 years old that you have to pay that outside of the plan.

[IamOld]

mountanddo HI - the IRS actually must be IN the plan - so since they are PRIORITY unsecured, the lawyer will get paid FIRST!!, then the IRS, then maybe no one!

At least in my district, the Trustee gets his percentage on what he actually pays each month...so say your payment is $150/mo, then he gets $15, then the creditors get $150-15 - so, he'll start paying your atty first, then the IRS and that's it.

Also $150 times 36 month=$5,400 - so once trustee is finished paying your atty, he'll pay the IRS their $400, and whatever else...is left goes to unsecureds UNLESS you have secured creditors paid from plan who go AFTER atty, but or concurrently with IRS.

[mountanddo]

mountanddo HI - the IRS actually must be IN the plan - so since they are PRIORITY unsecured, the lawyer will get paid FIRST!!, then the IRS, then maybe no one!

At least in my district, the Trustee gets his percentage on what he actually pays each month...so say your payment is $150/mo, then he gets $15, then the creditors get $150-15 - so, he'll start paying your atty first, then the IRS and that's it.

Also $150 times 36 month=$5,400 - so once trustee is finished paying your atty, he'll pay the IRS their $400, and whatever else...is left goes to unsecureds UNLESS you have secured creditors paid from plan who go AFTER atty, but or concurrently with IRS.

Thank you for explaining that. It makes much more sense now. Of course if I was good at math I may not be going through a chapter 13! LOL

[IamOld]

Me (well spouse - well us) either!!!! Math is not my friend :-)

[em96]

Thanks for the replies. Maybe I should have asked my question a different way, but it was answered. The trustee has to be paid for his services is what we are all trying to say, right? So the $130 is what he earns every month for dispersing my payment.

[IamOld]

em96 - yes - that is what he earns for "running" your case.