- The Chapter 7 trustee's job is to liquidate your nonexempt property and use the sale proceeds to repay your creditors. Most consumer Chapter 7 cases are no-asset cases because most people are able to protect all of their property with exemptions. If your case is a no-asset case, the trustee will investigate your property and finances to make sure you have no nonexempt assets and to make sure you have not committed any fraud or given any of your money away.
- In a no-asset case, the trustee's only compensation is $60. The trustee's payment comes from the $299 filing fee that you pay to file your Chapter 7 case. If you are able to waive the filing fee because you cannot afford to pay it, the trustee will receive no compensation for your no-asset case.
- If your bankruptcy estate contains nonexempt assets and the trustee sells those assets, or if the trustee collects money from any creditors you have paid or from any persons to whom you have transferred money, the trustee receives a percentage of those funds. He receives 25 percent of the first $5,000 collected; he receives 10 percent of any amounts between $5,000.01 and $45,000; he receives 5 percent of any amounts between $45,000.01 and $1 million; and he receives 3 percent of any amounts over $1 million.
- If the trustee wants to sell your nonexempt property and you want to keep it, the trustee may compromise with you and accept a settlement from you. The trustee will abandon the property in return for cash from you. The trustee will obtain permission from the bankruptcy court to enter this settlement, and once the court enters an order approving the settlement, the trustee will demand payment. The trustee's demand is not a bill but a court-ordered settlement that you must pay. The trustee may also demand cash from you if you have nonexempt cash on hand or in a bank account. These are generally the only instances in which you would have to pay the trustee yourself.
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