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How Much Do Bankruptcy Trustees Make

How Much Does It Cost For A Licensed Insolvency Trustee

How Do Licensed Insolvency (Bankruptcy) Trustees Get Paid?

Licensed Insolvency Trustees previously known as bankruptcy trustees are professionals accredited by the Canadian government to help Canadians with debt.

Although you might believe there is a fee to work with a licensed insolvency trustee, it is actually free of charge, according to the law. LITs are paid from the money that is recovered in the restructuring program that you choose. You arent required to pay them a separate fee.

Its your right as a Canadian citizen to consult directly with a licensed trustee, without any costs, to solve your issues with debt.

You can have a chat with a trustee for free to seek advice on how to deal with debt and which approach is best for you.

Licensed trustees can help you with:

  • Creating and filing a consumer proposal
  • Negotiating settlements with banks and insurers
  • Making arrangements with creditors for you
  • Providing financial / budgeting advice
  • Filing for bankruptcy.

And while a finance consultant may charge you for advice on how to deal with your debt, a Licensed Insolvency Trustee is mandated by law to be paid from the funds from your chosen restructuring program and NOT from you.

Also, their advice is solid. All Licensed Insolvency Trustees study insolvency legislation for a minimum of 3 years before even being able to apply to be interviewed by the federal government for a license to practice. They also are investigated by the RCMP before a license is approved too.

Find a licensed insolvency trustee near you.

Can I Keep My Home

We understand that your house is likely your most valued possession. There are exemptions that allow you to keep some of the equity in your home when you file for bankruptcy. Generally speaking, however, if youve already paid off a large portion of your mortgage , filing for bankruptcy might not be the best solution for youthe law requires you to use that equity to pay off some of the money you owe to your creditors.

To keep your home after filing a bankruptcy, you would need to pay a Licensed Insolvency Trustee the amount of home equity you haveminus any provincial exemptions. Home equity is calculated by subtracting the remaining amount of your mortgage, along with any outstanding taxes you owe, from what your house is currently worth on the market. For example:

For example: Current market value of Bobs home: $150 000

LESS:

Bobs estimated home equity $19 400

Depending on which province he lives in, Bob would have to pay up to $19,400 during the bankruptcy process in order to keep his home. This is one of the reasons why bankruptcy is only considered after other debt relief solutions have been explored. If Bob can afford to repay a portion of his debt, but not the full amount of equity in his home, he may wish to consider an alternative to bankruptcy, such as a consumer proposal. A Licensed Insolvency Trustee will be able to explain every option to help Bob choose the best solution that is right for him.

A Day In The Life Of A Bankruptcy Trustee By Karin Krueger

A better understanding of what trustees do in their day-to-day work may help credit and finance professionals appreciate some of the complexities of the bankruptcy process.

Bankruptcy trustees are often painted as the bad guys. Creditors sometimes think that trustees sell assets at bargain-basement prices for a quick result, or that they’re only in it for the fees.

*Karin Krueger is a freelance finance and business writer.

A version of this article first appeared in the Australian Restructuring Insolvency and Turnaround Association Journal.

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Get Help From A Chapter 13 Bankruptcy Lawyer Now

The bankruptcy attorneys of Sasser Law Firm have represented thousands of chapter 13 debtors.

Our team is prepared to work with you even in the most complex and urgent situations. We have pursued favorable outcomes for clients with dire circumstances, such as imminent foreclosures and vehicle repossessions. The firm has represented chapter 13 debtors in multiple appeals to the US District Court and the Fourth Circuit Court of Appeals.

When you hire our firm, you will work directly with an attorney who can provide the advice and legal guidance you need to effectively pursue financial relief. You will not be passed off to a paralegal. You can expect honest, direct communication from our team at all times with no fine print or surprise fees.

We understand that filing for bankruptcy is a big decision. While it may be the best option for some, we know that its not right for everyone. Thats why we will never pressure you to file for Chapter 13 bankruptcy if youre not ready. We only want what is best for you, and we are here to support you no matter what you decide.

To learn more about how Sasser Law Firm can help with your North Carolina Chapter 13 bankruptcy case, contact us today for a free initial consultation.

How A Chapter 7 Trustee Gets Paid

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In a Chapter 7 case, the trustee is paid in two ways depending on whether there are assets administered in your case, or not.

  • $60 administration fee. First, the trustee receives a $60 administrative fee from the bankruptcy filing fees you pay to the court clerk when you file the case . The trustee receives no administrative fee if the court waives the filing fee.
  • Percentage of the bankruptcy assets. The other source of income for a Chapter 7 trustee is a commission on bankruptcy assets sold for the benefit of creditors. The trustee receives a portion of the profits. If there are no assets in the case for the trustee to sell and the trustee does not recover any other money through tax refunds, lawsuits, or other actions, there is no further fee paid to the trustee. The commission comes from the money collected from the sale of nonexempt assets or the recoveries on lawsuits brought by the trustee.

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How Are Trustees Appointed To Bankruptcy Cases

The appointment is made by the local U.S. Trusteeâs office. The bankruptcy courtâs clerkâs office handles the assignments once a bankruptcy petition is filed. Itâs done based on a blind rotation. The filer finds out the name and contact information of their bankruptcy trustee when they get their Form 309A.

Bankruptcy Exemptions For Farmers

Up to 160 acres of land is exempt if your principal residence is located on that land and is part of your farm. Any personal property necessary for your farming operations over the next 12 months is also exempt from bankruptcy. For more information about bankruptcy exemptions in Alberta, please speak to a local Licensed Insolvency Trustee.

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Oct How Does A Chapter 13 Bankruptcy Trustee Get Paid

A Chapter 13 is a bankruptcy reorganization for individualsa payment plan, in other words. The bankruptcy court appoints a trustee and the trustee collects payments from debtors, and distributes that money to creditors. So, how does the Chapter 13 trustee get paid?

The Chapter 13 trustee is paid a percentage of what she collects from you and distributes to your creditors. That last part is importantif she collects too much from you and has to refund it, she doesnt get to keep that. She is only paid based on what is paid to creditors. The amount of the trustees commission varies from time to time and district to district, and is re-set periodically. The maximum commission is 10% of distributions, and the trustee must pay administrative expenses out of that. In addition, the trustees personal compensation is capped. The cap is slightly less than the compensation paid to certain judicial officials, including bankruptcy judges.

One of the important ways that experienced bankruptcy counsel can help you is by familiarity with the trustee commission. Obviously, you dont want to pay a higher plan payment than you need to pay. But, not only is that commission a factor in determining how much your Chapter 13 plan payments will be, it is also a factor in determining whether you qualify for Chapter 7.

Compensation Of The Trustee

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Trustees are paid on commission. The more money the trustee is able to pay to creditors, the higher the commission.

The trustee commission schedule is set forth as follows in section 326 of the bankruptcy code:

In a case under chapter 7 or 11, other than a case under subchapter V of chapter 11, the court may allow reasonable compensation under section 330 of this title of the trustee for the trustees services, payable after the trustee renders such services, not to exceed 25 percent on the first $5,000 or less, 10 percent on any amount in excess of $5,000 but not in excess of $50,000, 5 percent on any amount in excess of $50,000 but not in excess of $1,000,000, and reasonable compensation not to exceed 3 percent of such moneys in excess of $1,000,000, upon all moneys disbursed or turned over in the case by the trustee to parties in interest, excluding the debtor, but including holders of secured claims.

Nelson Mullins attorneys are experienced in handling all types of bankruptcy matters and have unique experience in representing bankruptcy trustees around the country and representing creditors in dealing with bankruptcy trustees, including defending clawback claims brought by trustees.

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The Trustee Gets Paid For Sales Costs

The Chapter 7 trustee can also recover costs for expenses, such as professional accounting fees. But like the commission, this can only happen after the trustee files a fee application and request for reimbursement of costs and it is approved by the court after notice to all parties in the bankruptcy case.

What Happens At The Meeting Of Creditors

During this meeting, the trustee will verify your government-issued photo ID and Social Security card or proof of Social Security number. The trustee will also need your proof of income, bank statements and other financial documents, like tax returns and loan statements.

It is the trustees job to ask you questions under oath and verify that your financial information is complete and accurate.

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Bankruptcy Exemptions In New Brunswick

  • Furniture, household furnishings and appliances up to $5,000
  • No limit on clothes for you and your family
  • Enough food and fuel for you and your family for three months
  • Tools used by you in the practice of your trade up to $6,500
  • One motor vehicle up to $6,500, if needed for employment
  • Dogs, cats, and other domestic animals belonging to you
  • No limit on medical or health aids for you and your family
  • Certain government pension plans are exempt from bankruptcy

Bankruptcy Exemptions On Prince Edward Island

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  • No limit on clothing for you and your family
  • No limit on medical or health aids
  • Any motor vehicle needed for transportation to work up to $6,500, or up to $3,000 if not used for work
  • Household furniture, utensils, equipment, food and fuel up to $5,000
  • Tools used by you in your business or trade, up to $2,000

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Free Calculator To Determine The Bankruptcy Trustees Commission In A Chapter 7 And Chapter 11 Bankruptcy

Bankruptcy trustee compensation in Chapter 7 & 11 is fixed by many courts according to a specific statutory formula. The way that the formulate works is that the more the bankruptcy trustee distributes to creditors, the more money the trustee generally makes.

Specifically, the compensation of a trustee in a Chapter 7 bankruptcy or Chapter 11 bankruptcy is defined by statute under Section 326 of the Bankruptcy Code ) as follows:

In a case under chapter 7 or 11, other than a case under subchapter V of chapter 11, the court may allow reasonable compensation under section 330 of this title of the trustee for the trustees services, payable after the trustee renders such services, not to exceed 25 percent on the first $5,000 or less, 10 percent on any amount in excess of $5,000 but not in excess of $50,000, 5 percent on any amount in excess of $50,000 but not in excess of $1,000,000, and reasonable compensation not to exceed 3 percent of such moneys in excess of $1,000,000, upon all moneys disbursed or turned over in the case by the trustee to parties in interest, excluding the debtor, but including holders of secured claims.

Use the free bankruptcy trustee compensation calculator to determine the trustees fee that the bankruptcy court is able to award.

The bankruptcy attorneys at Talkov Law are skilled in the areas of:

In A Chapter 13 Bankruptcy

A Chapter 13 trustee is responsible for overseeing your repayment plan. That includes

  • Making sure your plan is reasonably affordable
  • Collecting your payments according to the plan
  • Distributing payments to your creditors

The trustee also holds the meeting of creditors in a Chapter 13 bankruptcy.

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Prince Edward Island Bankruptcy Exemptions

On Prince Edward Island, property exempt from seizure in bankruptcy is set by the provincial government and applies to the equity in an asset. Equity is the difference between the value of the asset and what you owe on the asset.

Example: If you have a car worth $6,000 and you still owe $3,000 on the loan, the equity you have in the car is $3,000. In P.E.I., the exemption for a car is $6,500. In this case, you are entitled to keep the car and the creditors included in your bankruptcy claim cannot take it from you.

Trustee’s Role In Chapter 7 & 13 Bankruptcies

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The responsibilities of a trustee vary depending on whether the case is a Chapter 7 or Chapter 13.

Chapter 7 bankruptcy trustee responsibilities typically include:

  • Identifying the debtors property and assets that may be sold to repay creditors
  • Facilitating the sale of the debtors property
  • Challenging creditors claims if they violate the debtors rights
  • Distributing proceeds from asset sales to creditors
  • Objecting to a discharge if necessary

The above represent only some of the responsibilities that the Chapter 7 bankruptcy trustee may have.

In Chapter 13 bankruptcy, the trustee assures that debtor and creditors interests are fairly represented, but the Chapter 13 trustees responsibilities also differ from the Chapter 7 trustees in large part because there is no liquidation process.

Chapter 13 trustees are responsible for:

  • Reviewing the debtors repayment plan and make objections if appropriate
  • Overseeing and coordinating the meeting of creditors
  • Receiving and distributing funds from the debtor to repay creditors as outlined in the repayment plan
  • Making objections to a repayment plan if necessary

For a more detailed explanation of the trustees role in your bankruptcy, contact Weintraub & Selth, APC. Over the last several decades, we have been representing clients through the bankruptcy process, and we are prepared to answer any questions you may have about the trustees role in your bankruptcy.

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What Is A Licensed Insolvency Trustee

A licensed insolvency trustee is a professional licensed and regulated by the Office of the Superintendent of Bankruptcy Canada . LITs were formerly known as trustees in bankruptcy. However, in April 2016, the OSB issued a directive requiring trustees to use the professional designation of licensed insolvency trustee to more accurately reflect the services they provide.

Average Cost Of Chapter 7 Bankruptcy In Major Cities

So, lets take a look at some PACER info on the actual bill for an attorney. We took a look at a random sample of Chapter 7 cases in a few major metro areas to get a sense of the bankruptcy attorney fees in each area. In Los Angeles, the tab ranged from $1,500 to $2,000. In Dallas, it was $774 to $1,820. In Miami, attorneys charged anywhere from $1,000 to $2,000, and in New York City, the bill was in the range of $1,000 to $2,200.

Theres a lot of variation depending on the complexity of the case. In addition, many debtors qualify for free or discounted legal help, leading to even more variation.

One bankruptcy attorney in Los Angeles warns consumers to be on the lookout for competent, board-certified attorneys to handle their case. A bankruptcy is delicate, and you want someone with plenty of experience to represent you. A difference on the front end of a few hundred dollars could actually cost thousands in the long run, including refiling fees.

People looking to file for bankruptcy should be careful about focusing solely on the cost, said M. Erik Clark, managing partner of Borowitz & Clark, LLP. There are so many ways that a bankruptcy case can turn out wrong and having an experienced attorney can help them avoid a bad outcome.

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What Are Top 10 Highest Paying Cities For Bankruptcy Trustee Jobs

Weve identified 10 cities where the typical salary for a Bankruptcy Trustee job is above the national average. Topping the list is San Mateo, CA, with Berkeley, CA and Daly City, CA close behind in the second and third positions. Daly City, CA beats the national average by $9,736 , and San Mateo, CA furthers that trend with another $12,374 above the $57,644 average.

Importantly, San Mateo, CA has a moderately active Bankruptcy Trustee job market with only a few companies currently hiring for this type of role.

With these 10 cities having average salaries higher than the national average, the opportunities for economic advancement by changing locations as a Bankruptcy Trustee appears to be exceedingly fruitful.

Finally, another factor to consider is the average salary for these top ten cities varies very little at 9% between San Mateo, CA and San Francisco, CA, reinforcing the limited potential for much wage advancement. The possibility of a lower cost of living may be the best factor to use when considering location and salary for a Bankruptcy Trustee role.

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