subject: How Bankruptcy Trustees Are Paid [print this page] How Bankruptcy Trustees Are Paid How Bankruptcy Trustees Are Paid
When you file for bankruptcy, you are assigned a bankruptcy trustee to help handle your case. The trustee is the most important person that you will be dealing with while your bankruptcy is ongoing.
This is the individual who which you will go to for answers to you bankruptcy queries once your bankruptcy filing has been approved. This is the person who will take control of all your non-exempt property and put it up for auction or sale. And he is the one who will communicate with your creditors and pay them from the auction proceedings. And, lastly, the bankruptcy trustee is also the person who ensures that all of the paperwork that you submit to the courts is complete and accurate.
So who does this bankruptcy trustee work for? Well, he works for a number of people - you, the courts, the creditors - but he ultimately reports to the U.S. Trustee Office. There are 21 regional U.S. Trustee offices throughout the country. Their goal is to oversee the bankruptcy trustees and ensure that all of the bankruptcy cases that enter the courts are being handled according to the various federal laws. Normally, you as the person filing, will have no direct contact with the U.S. Trustee unless there are some illegalities or other unusual circumstances involved.
What kind of training is required to be a bankruptcy trustee? Well, there is no type of formal training involved. What normally happens is that a bankruptcy trustee comes from the ranks local bankruptcy lawyers in the area. Even though, being a lawyer is not a prerequisite to being a bankruptcy trustee. Normally, what happens, is that a few days after you file for bankruptcy, you will get a notice in the mail letting you know who your bankruptcy trustee is. You call him and from that point on, he is in charge.
One of the very interesting and generally unknown facts about bankruptcy trustees is that they are paid indirectly by you. They are paid by commission. They get paid by taking a percentage of the sales of your non-exempt items that are sold at auction or though other means. In theory, this gives him a monetary incentive to get as much as he can for your various items which is good for the creditors who are looking to be paid off. In actuality, however, most of the time they are looking for the quickest sale to avoid having to spend too much time on a particular bankruptcy.
From a legal standpoint, probably the most critical fact for you to understand is that once the bankruptcy trustee has been assigned to you, he is in control of all of your non-exempt assets. This means that, without his approval, you cannot sell or get rid of any of it. He can take any or all of these items to sell as he pleases. If you violate these terms, it is likely that your bankruptcy case will be dismissed and you will not longer have bankruptcy protection for your exempt items.
