Legal Question in Bankruptcy in Massachusetts

I am in chapter 13 bankruptcy which was filed over 7 years ago. I made all the payments now according to the approved plan. I had 2 patent lawsuits which I filed before the bankrupcy and I have more patent case which was filed while in bankruptcy. The trustee has put liens on the cases so that the unsecured creditors can get 100 cents on the dollar in case of success.

Recently, however, my attorney presented me with a stip that says that I have to pay out of any settlement not only 100 cents on the dollar of what I owed but also 10% trustee dividend.

1) My understanding is the trustee gets paid out of the funds he/she collects for creditors. So, why am I being asked to pay 10% on top of paying off 100% of all debts?

2) Sections 326, 330 of the bankruptcy code limit trustee compensation to a cap of 5 (five) percent of total money collected and require the trustee to justify his/her fees. Why is the trustee trying to make me sign a stip that I will pay 10% above and beyond payments to creditors?

3) The trustee has made threats of dismissing the case unless I sign the stip. She already has liens against all 3 cases, why does she need a stipulation? Can she really dismiss my case since I satisfied all the requirements already?


Asked on 6/29/12, 11:33 am

1 Answer from Attorneys
Charles Andersen Charles Andersen, Atty

I am in chapter 13 bankruptcy which was filed over 7 years ago The answer is pretty simple. If you have more countable assets than you have debts, creditors must realize 100%. Trustee's fee's are extra. Some court's will even make you pay interest for the length ot time it takes your plan to yield the 100%.

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Answered on 6/29/12, 1:40 pm


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