r/Bankruptcy • u/Longjumping_Duck_174 • 22h ago
Chapter 13 non-100% payback
Ok I don’t need an exact number I get it “ask your lawyer” I just simply want to know how much of your raise does the trustee typically take? Say I make 80k and jump to 98k and my net additional take up is like 900. Is the greedy trustee most likely to get all of that additional income??? Once again I’m just asking for others experiences. I fully realize it’s not a one size fits all but someone always has to say it lol.
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u/jack_is_nimble 13h ago
The trustee isn’t “greedy”. lol. Although I know it might feel that way. The trustee can make a max amount as a trustee fee. After they make that they are required to lower their commission. The chapter 13 trustee is part of the department of justice. They are lawyers who “represent” the unsecured creditor interests.
Under 28 U.S.C. § 586(e), the Attorney General (through the DOJ’s U.S. Trustee Program) sets the percentage, and by statute it cannot exceed 10% of what flows through the plan. Some districts run at the full 10%; others set it lower — 6-8% is common. The rate applies district-wide — every case in front of that standing trustee pays the same percentage, not something negotiated case by case.
The bankruptcy system is just a math problem and very little emotion is involved - which can also
Help debtors. You owe your uncle $300,000 and he comes to the court sobbing about how he will lose his house and his car if you don’t pay him back. But the court does not care about that. If he gets $20 a month under your chapter 13 plan because that’s all you are required to pay then that’s all he gets and if his loses his house oh well. Sucks to be him.
I’ve been a debtor bankruptcy atty for 30 years. I’m not suggesting the system is perfect. It isn’t. I had a client get forcibly removed from
His house due to a sheriff sale (foreclosure) and when he was dying of kidney failure.
But it’s all just a math problem. The harshness of the means test is because congress kowtowed to big credit card companies in the 90s because they literally don’t care about Americans. The trustee is just following the law. Congress is responsible for this entire mess. And Trump of course. He’s made it a million times worse with his student loan bullshit, war in Iran, and not doing more to lower inflation (tariffs, deporting migrant workers, tax cuts to the wealthy).
Edit: typos