What, Exactly, Is the Trustee’s Percentage Fee

In recent years, a handful of cases have discussed the issue of what happens to the trustee’s percentage fee, collected from debtor plan payments, upon the dismissal or conversion of a case prior to confirmation. This is an emerging area of law, with decisions on both sides. However, with this new issue, there appears to be at least some confusion about this fee. Specifically, at least some judges seem to equate the trustee percentage fee with the trustee’s personal compensation.So, let’s go back to basics – just what is a trustee percentage fee, how is . . .

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Rebecca Herr

Chapter 13 Standing Trustee for the District of Maryland (Annapolis)

Becky Herr is a Chapter 13 Trustee for the District of Maryland and District of Columbia, a position she has held since 2019. Before becoming a trustee, she worked as a staff attorney, gaining extensive experience in bankruptcy law. Becky is a graduate of the University of Maryland School of Law and is committed to continuous learning. Currently, she is trying to learn French and how to serve a Tennis ball.

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In the continually evolving field of consumer bankruptcy law, a series of Supreme Court decisions shape how cases are administered nationwide. Over the coming weeks, we will highlight key decisions that every bankruptcy practitioner should recognize—both by name and by the issues they resolve. This week’s ‘memory work’ is: Johnson v. Homestate Bank; Harrington v. Purdue Pharma; Bartenwerfer v. Buckley; Fulton

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The no man’s land between the mortgage due date and late payment is a persistent trouble spot for Chapter 13 practitioners. For example, are there arrears when the case is filed during the grace period and the payment made before it was late? In Borre, Judge Ronald Sargis of ED CA said no. He held that the payment was not...

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The Academy

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By Regina Logsdon, Academy Executive Director Erin M. McCartney was appointed as the Chapter 13 Standing Trustee for the District of Nebraska beginning on January 1, 2022. Erin stepped into metaphorically very large and capable shoes as she replaced retiring Kathleen Laughlin. Erin grew up in Illinois, graduating college from Bradley University in Peoria (Go Braves!). Law school required a...

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Study from IZA Institute of Labor Economics – The Long-Run Effects of Individual Debt Relief

Edward C. Boltz

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Abstract: Individuals with extensive debt may be granted debt relief in court. We provide a comprehensive evaluation of the Danish debt relief program with data from court records linked to nationwide register data. Using event-study methods and quasi-random assignment of applicants to court trustees with varying admission rates, we show that debt relief leads to a large increase in earned income, employment, assets,...

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By Lawrence R. Ahern, III, Brown & Ahern (Nashville, TN) Introduction Since April 1, 2020, many unemployed people in the United States have begun to receive "a recovery benefit" in the amount of $1,200.1 These payments, under the CARES Act2 stimulus program, were intended to provide some relief to suffering Americans. However, the most financially distressed Americans, perhaps with existing,...

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From the Editor – Discharge

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By The Honorable William Houston Brown (Retired) Failure to pay postpetition fees under Rule 3002.1 did not prevent discharge. The debtor had completed payments to the trustee and postpetition mortgage payments to the creditor, but she had not paid $1,370 in postpetition fees that had been asserted by the mortgage creditor and noticed to the debtor under Rule 3002.1. That...

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Cathy Moran

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Most lawyers were torn between wincing and laughing when a lawyer filed a brief packed with case authority created out of whole cloth by an AI bot. Meanwhile, a segment of the bar is fretting that we will be replaced by powerful artificial intelligence. My concern, based on a couple of casual forays into AI, is not that I will...

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What, Exactly, Is the Trustee’s Percentage Fee

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Rebecca Herr

Chapter 13 Standing Trustee for the District of Maryland (Annapolis)

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