What Do You Know About the New Claims Transfer Fee?

Beginning May 1st, a party filing a transfer of claim in the bankruptcy court will be required to pay a fee of $25.   Pursuant to 28 U.S.C. § 1930(b), the Judicial Conference of the United States is authorized to prescribe fees in cases filed under the Bankruptcy Code.  During its September 2012 session, the Conference established this new transfer of claim fee of $25. In considering this action, the Judicial Conference recognized the impact that claims transfers have had on the workload of the bankruptcy courts.  Bankruptcy Rule 3001(e) requires the clerk of court to notice the transfer of a claim.  If an objection to the transfer is filed, additional notice is required.  As the business of claims transfers has grown exponentially, the associated work for the Bankruptcy Court and Clerks’ offices has also increased.

While most attorneys in the bankruptcy world have established CM/ECF accounts, where fees are paid via credit card, many mortgage servicers are not similarly equipped.  The claims transfer fee will be treated just like any other court imposed fee.  Presently, most bankruptcy courts permit multiple fee based filings or actions to be completed with the necessary fees being paid at the end of the transaction through pay.gov.

What constitutes a claim transfer?  According to a source close to the Administrative Office of the United States Courts, a claim transfer is a sale of a claim in a bankruptcy proceeding by a seller/creditor that is willing to take a reduced price to have cash in hand or is concerned about how the claim will fare in the bankruptcy process.

The far reaching consequences of this fee remain to be seen.  How might this fee impact the market for buying and selling claims?  Will the fee discourage filing the transfer thus increasing the trustees’ workload?  Will creditors be likely to reconsider the purchase of claims, particularly in portfolios where the fee is likely to exceed the collectable amount of the claim?  Will the fee impact future pricing of forward flow sales of chapter 13 claims?  These and many more questions remain to be answered.

If you are interested in a dialogue with the Administrative Office of the Courts, please send your name, company, phone number, and email address to the Academy.

No Author Biography has been linked to this Article.

Related Articles

July 18, 2021
By Jay S. Jump, CEO, CertificateofService.com (Pasco, WA) One of the most important issues in serving your Chapter 13 Plans, Motions to Modify, Motions to Incur, Fee Applications, and other necessary documents served or noticed under the bankruptcy rules is using the most recent Master Mailing List (“MML”) from the Court. Your Court Clerk maintains and updates, on a regular...
Academy Circle Logo Final
December 19, 2021
One of our very newest trustees is very familiar to many of us. After serving ten years as Chief of Staff (a/k/a Staff Attorney) to Martha Bronitsky, on August 1, 2021, Nima Ghazvini was appointed Chapter 13 Standing Trustee for the Districts of Hawaii, Guam, and Northern Mariana Islands. What you may not know is that Ghazvini was born in...
Academy Circle Logo Final
December 4, 2022
Many have had the unpleasant experience of coping with an ill-mannered and disrespectful opposing counsel. Unnecessary motions are filed and unfounded allegations are asserted. Relief requested has no basis in fact or law. Temperatures rise. The volume of argument is loud. Your staff and you are upset. What to do?We asked the Emeritus Trustees and here are some recommendations: First,...
January 6, 2019
IRS issued the 2019 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Beginning on Jan. 1, 2019, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be: 58 cents per mile driven for business use, up 3.5 cents from...
April 7, 2019
By Wm. Houston Brown, United States Bankruptcy Judge (Retired) Attorney Fees - Chapter 13 debtor’s attorney not entitled to recovery under § 330 of fees that were incurred in defending prior attorneys’ sanctions motion. The debtor’s prior attorneys had sought to impose sanctions on the current attorney, and that attorney successfully defended against sanctions. However, the fees incurred by the...
Bankruptcy and appellate courts in increasing numbers are considering whether it is appropriate for debtors filing for Chapter 7 relief and attorneys representing them to enter into bifurcated fee agreements. It has been recognized that one of the reasons that debtors may decide to file Chapter 13 rather than Chapter 7 is that attorneys require payment of the Chapter 7...
March 6, 2022
There are several different types of security clearances that an individual might seek as a prerequisite to employment. What each clearance requires depends on many factors, such as whether the person is a civilian or part of the armed forces, whether the clearance is for facility access only (versus access to sensitive documents), and the scope of the access in...
July 11, 2021
Kara K. Gendron, Esquire, Mott & Gendron Law (Harrisburg, PA) A “kill switch” is a device which can be used to disable a machine or program. They have been used for years in a myriad of safety measures, such as shutting down machinery in the event of an emergency, or to prevent the theft of a machine or data. Some...
October 30, 2022
Spending every dollar they make, and then some, is often how our Chapter 13 clients got into financial trouble. Yet Chapter 13, as practiced, validates the practice of continuing to spend 100% of each month’s income during the life of the plan. In doing so, we, as a society, squander the chance to use Chapter 13 to teach new budgeting...
October 11, 2020
By Cathy Moran, Esq. (Redwood City, CA) Once again, I sat in a 341 meeting where the trustee’s representative purported to deliver vital information to the assembled debtors. She had a captive audience of anxious listeners. She had ostensible power of life and death over their financial future. They needed to know what she had to say. But as communication,...