§ 54.8     Compensation When Trustee Is Not a Standing Trustee
Cite as:    Keith M. Lundin, Lundin On Chapter 13, § 54.8, at ¶ ____, LundinOnChapter13.com (last visited __________).
[1]

In districts where the number of Chapter 13 cases does not warrant the appointment of a standing trustee,1 the U.S. trustee appoints a disinterested person to serve as trustee in each Chapter 13 case.2 28 U.S.C. § 586(e) provides for compensation of standing Chapter 13 trustees but says nothing about the compensation of a disinterested person serving in a single Chapter 13 case. Apparently, the compensation of such a trustee is controlled by 11 U.S.C. § 326(b): The bankruptcy court will allow reasonable compensation and reimbursement of actual, necessary expenses as provided in 11 U.S.C. § 330. The Attorney General is not involved in fixing fees for a Chapter 13 trustee who is not a standing trustee.

[2]

With respect to a single-case trustee, § 326(b) limits the maximum compensation to 5 percent “upon all payments under the plan.” The phrase “upon all payments under the plan” in 11 U.S.C. § 326(b) is consistent with the pre-1986 versions of 28 U.S.C. § 586(e) and 11 U.S.C. § 1302(e) but is different from “all payments received by” the trustee in 28 U.S.C. § 586(e)(2) as amended in 1986.3 The pre-1986 case law interpreting former 11 U.S.C. § 1302(e) to allow Chapter 13 trustees a percentage fee on payments made directly by the debtor4 may still have vitality when no standing trustee is serving and compensation is calculated under § 326(b).

[3]

Section 330(a) limits reimbursement of expenses to “actual necessary expenses.” Under § 330(c), absent an order to the contrary, a single-case trustee shall receive compensation of not less than “five dollars per month from any distribution under the plan during the administration of the plan.”

[4]

Because the Code provisions for compensation and reimbursement of expenses of a single-case trustee are less rigorous, debtor’s counsel may be able to negotiate compensation and expenses on a case-by-case basis. In districts without standing trustees, there are sometimes local rules or local practices that fix standard fees not unlike those payable to a standing trustee. If there is no standing trustee and if the debtor proposes large payments (a home mortgage, for example) or lump-sum payments, counsel should attempt negotiation of fees with the trustee.


 

1  28 U.S.C. § 586(b).

 

2  11 U.S.C. § 1302(a).

 

3  See §§ 63.1 [ Standard Percentage Fee and Expenses ] § 54.1  Standard Percentage Fee and Expenses and 64.4 [ Compensation on Direct Payments by Debtor ] § 54.6  Compensation on Direct Payments by Debtor.

 

4  See § 64.4 [ Compensation on Direct Payments by Debtor ] § 54.6  Compensation on Direct Payments by Debtor.