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  1. #4
    Join Date
    Sep 2010
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    478

    Default Re: Can a Trustee Seek More Money Than is Listed in the Claims Register Summary

    Quote Quoting mbaron21
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    But the question is, if you are cutting a deal with the trustee, whether or not the trustee is permitted to try and get from the debtor more than is listed on the Claims Register Summary?
    You missed my point. The Trustee will not collect more than is needed to pay ALL claims in full. Those claims, pursuant to 11 USC 726 INCLUDE all of the Trustee's fees (based upon a percentage of what he/she pays out), the Trustee's legal fees if he/she hired an attny, all timely filed claims, late filed claims (if any) and, if the estate is solvent, interest on the claims and, if there is anything left over it goes back to the debtor.

    Therefore, if the claims register shows $50,000.00 and you settle whatever issues you have for $10,000.00 the Trustee will not be paying all claims in full. If the claims register shows $10,000.00 and you settle for $50,000.00 the Trustee may (and can) solicit creditors to file late claims. Very few will. He/she will then file a Notice of Proposed Distribution and any money not paid out will eventually be returned to you.

    If you have an attny the attny will know how to work with the Trustee to try to get the Trustee not to solicit late claims thus only collect what is needed to pay all timely claims, the Trustee's fee and the Trustee's attny.

    And. . . we are talking unsecured not secured claims. Trustees typically do not pay secured claims as the creditor can look to its collateral for payment.

    Des.

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