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Who do trustees work for?


bw4444
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Well, I know the simple answer is the creditors. But how does that work? How does a trustee get paid--does the BK court pay them a set fee? Does each creditor sent them money? What is the money trail?

What is their relationship with the courts? Does the trustee answer to the BK judge, or is the trustee independent?

Is there a good link where this relationship is described?

Thanks, bw

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Thanks for the link DocDon.

To quote from the BK Basics brochure:

TRUSTEE

The representative of the bankruptcy

estate who exercises statutory powers,

principally for the benefit of the unsecured

creditors, under the general

supervision of the court and the direct

supervision of the United States trustee

or Bankruptcy Administrator.

So, they are principally looking after the UNSECURED creditors.

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The trustee works for the benefit of unsecured creditors. They receive a flat fee for each case they handle ($60.00) and can retain a % of assets they recover for unsecured creditors. It is a sliding scale based on the amount recovered. They can also recover their expenses and the cost of their own legal counsel used to recover the assets as an expense of administration. In my area, the Trustees usually hire themselves or partner as counsel, so recover additionally that way.

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  • 2 weeks later...
Quick question... is there a difference between a Private Trustee and a U.S. Trustee? I can't see a U.S. Trustee reaching into the "goodie bag" for a percentage.... :?:

Yes. I believe a US Trustee contracts with and oversees a number of private trustees. The US Trustee works on salary for the BK court while the private trustee works on contract. Seems I got this info from the US Bankruptcy court website.

bw

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