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PI settled and bk trustee took $38,000 from our settlement as fee. We would in the dark about it the whole time.

Clarkston, MI |

Husband injured in auto accident 2009. Filed for bk in 2010. Got discharged. Won PI in 2012 for $4oo k. Took 10 month to finally get money from trustee after paying off the $50,000 in debt back to creditors. Found out we also have to pay trustee's fee of $38,000. Can they do that?

Attorney Answers 8


  1. yes the bankruptcy trustee can charge a fee. However Imust be a reasonable fee. Talk with your bankruptcy lawyer in review the fee documents


  2. I recommend you speak with a new bankruptcy attorney about your options, and whether the Trustee has the ability to go after your settlement money so many years after discharge. Good luck.


  3. Look at prior answers.


  4. You wrote, "Husband injured in auto accident 2009.
    Filed for bk in 2010. Got discharged. Won PI in 2012 for $4oo k.
    Took 10 month to finally get money from trustee after paying off the $50,000 in debt back to creditors. Found out we also have to pay trustee's fee of $38,000.
    Can they do that?"

    A: When a Chapter 7 bankruptcy Trustee finds assets to seize on behalf of Creditors of a bankruptcy debtor, the process of administration can take years if the asset is a chose in action or pending lawsuit.

    The bankruptcy Trustee can continue administration of the bankruptcy estate assets long after the Order of Discharge has been entered in the case.

    As Trustees do not distribute in kind, they must await the liquidatation of the the asset before starting the final phase of payout of the assets of the bankruptcy estate.

    Upon liquidation of the assets, the bankruptcy Trustee sends out notices to Creditors to file their claims with adequate documentary proof, if these "proofs of claims" are accepted, the Creditor gets to share in the distribution of the money held by the bankruptcy Trustee.

    The bankruptcy Trustee has the right to a commission for administering assets on behalf of Creditors. There are typically additional expenses.
    The bankruptcy Trustee usually hires an attorney, upon court approval, who submits a bill for payment. Other professionals might also be hired (a realtor, for example) who would also be entitled to fees. Each of these parties may also bill for costs.

    From this remainder of the bankruptcy estate, the Creditors obtain funds, that may be less than 100% of their proven claim


  5. I agree with Attorney Bollinger. Additionally, the Trustee must have submitted an accounting of all the funds paid to creditors, Trustee's lawyers, Trustee's fees and funds disbursed to you. In retrospect, it seems as if a Chapter 13, should have been a better filing for you. But, it all depends on the circumstances of your case. In a Chapter 13, the Trustee should have not have gotten more than 10 percent fee per year. However, the excess indicates that he may have had a lawyer intervene in your case. Talk to your own BK lawyer to explain this to you. Best of luck.

    This answer is provided by Manuel A. Juarez, Esq., El Abogado de Accidentes de Autos de California: 510-206-4492. El Abogado de Accidentes de Autos provides answers of a general context. These answers are not intended to form an attorney client relationship. El abogado de Accidentes de Autos y Lesiones Personales practices in Antioch, Berkeley, Concord, Oakland, Hayward, Martinez, Newark, Richmond, San Francisco and San Rafael. El abogado de accidentes y lesiones is licensed only in California. This information is good only in California and it is not to be taken as legal advice on car accidents, personal injury, divorce, bankruptcy or in any other type of situation. Esta respuesta es del Abogado de Accidentes de Autos y Lesiones Personales de Acidentes de carros, Manuel A. Juárez, 510-206-4492. Abogado Hispano de Accidentes, Divorcios, Abogado Latino de Accidentes, y Abogado de Acidentes de Oakland, Hayward, San Francisco, y California. Estas respuesta son solo para información general y no consisten en consejo legal sobre divorcios, mantención de esposas, mantención de hijos o bancarrotas. Las respuestas son comentarios legales que no forman una relación de abogado y cliente. Manuel Juarez, Esq., esta licenciado solo en el Estado de California.


  6. As long as the court would consider the trustee's fee reasonable under the circumstances, what you describe sounds entirely legitimate.

    Advice on this forum is for informational purposes only and should never be mistaken as a substitute for legal advice. If you are in need of legal advice, you should consult local legal counsel.


  7. Fee arbitration.

    Only 29% Contingency Fee! Phone: 215-510-6755 www.InjuryLawyerPhiladelphia.com


  8. Your bankruptcy trustee permitted the action to go forward. He's entitled to a fee.

    If you'd like to discuss, please feel free to call. Jeff Gold Gold, Benes, LLP 1854 Bellmore Ave Bellmore, NY 11710 Telephone -516.512.6333 Email - Jgold@goldbenes.com

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