Why Is Trustee Scrutinizing Your Maryland Bankruptcy Case?

Trustee Scrutinizing Bankruptcy Case

When my clients ask, “Why is the trustee looking so closely at my bankruptcy case?” I tell them about trustee appointments.  Chapter 7 trustees are private attorneys appointed to a panel by the Department of Justice.  Trustees are paid only $65.00 per case according to statute and that is the full payment for approximately 95 percent of their cases.  By looking closely at bankruptcy schedules, in about 5 percent of their cases, trustees are able to identify assets.

  • The trustee tries to locate assets which can be liquidated to pay your creditors.
  • When trustees succeed in finding assets to pay creditors, they get paid more than the $65.00.
  • Trustees can then hire their own law firm and be paid $300.00 to $500.00 an hour.  Besides the hourly billing rate, the trustee also receives a percentage of the amount distributed to creditors.

Trustees cannot afford to take much time to determine whether they’re likely to identify assets for your creditors.  If the trustee decides there are not likely to be worthwhile assets, they’re going to close the case, file a “No Distribution” report and conclude that the bankruptcy is a no-asset case.  That’s a great outcome for a Chapter 7 debtor.

The bankruptcy trustee is going to keep the case open and analyze whether or not there actually are assets.  If the trustee determines there are assets to pay creditors, the trustee will have a payday worth far more than the $65.00 that they’ll normally get from a case.  For more information, read Why Do Maryland Trustees Scrutinize Bankruptcy Cases So Closely?

If you have a question about whether or not the trustee is going to take a close look at your case, please pick up the phone and call me at 410-484-9000.  I’d love to hear from you.


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