§ 54.8 — Compensation When Trustee Is Not a Standing Trustee
Revised: April 30, 2004
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.
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).
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.”
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.