In Chapter 7 bankruptcy, the bankruptcy trustee is allowed to sell your non-exempt assets or properties and use the proceeds to repay your debts. However, you can protect some or all of your property by using certain exemptions. If you have collectible assets, your trustee can collect the administrative fees (taken from your collected assets) once the bankruptcy case closes, which is not an out-of-pocket expense.
The collection of administrative fees as per the 11 U.S. Code § 503 is as follows:
- There can be a timely or tardy filing (permitted by the court) of a request for administrative fees, by an entity, to be paid.
- After a hearing, administrative expenses along with other claims (section 502 (f) of this title) shall be allowed, including—
(a) Necessary expenses to preserve the estate, including—
- Salary and commission for services provided after the case began.
- Wages and benefits granted to the National Labor Relations Board or the judicial proceedings.
(b) Any tax—
- Secured or unsecured given to the estate, including property taxes whose liability is in rem, personam, or both, leaving the kind of tax mentioned in section 507 (a)(8) of this title.
- Attributable to a lavish allowance of a tentative adjustment received by the estate whether the taxable year related to it had ended before or after the case began.
(c) Any fine, or a tax-related credit reduction mentioned in sub-paragraph (B) of this paragraph in this title.
(d) A governmental unit shall not request an expense (mentioned in sub-paragraph (B) or (C)) to be paid, if unable to fulfill the requirements of subsection (a).
(3) The necessary expenses specified in paragraph (4) of this subsection, given to—
(a) A creditor
- Filing a petition under section 303 of this title.
- That recovers the transferred or hidden properties (by the debtor) with the court’s
- Connected with the prosecution of the debtor’s case, business or property related criminal offense.
- For substantially contributing in Chapter 9 or 11 cases of this title. The same also works for an equity security holder, an indenture trustee, or a representative committee (of creditors or equity security holders).
(b) Compensation for the services of a custodian replaced under section 543.
(c) A committee member chosen under section 1102 of this title.
(4) Reasonable compensation and reimbursement for professional services provided by a lawyer or an accountant of an entity with allowable expense under subparagraph (A), (B), (C), (D), and (E) of paragraph (3) of this sub-section.
(5) Compensation for the substantial contribution of an indenture trustee in chapter 9 or 11 case.
(6) Mileage and fees payable under the 119th chapter of title 28.
(7) In regard to a non-residential real property lease, earlier assumed under section 365 but later rejected, a sum equal to all the due monetary obligations (excluding the ones related to an operational failure or a penalty provision) for 2 years’ period, following the rejection date or the date of premises’ actual turnover, without any reasonable reduction except for the ones actually received or about to be received from an entity apart from the debtor, and the claim for remaining due sums for the balance of the lease’s term shall be a claim under section 502 (b)(6).
(8) The necessary costs and expenses given to a trustee or a Federal agency (section 551 (1)) or a state or a political sub-division agency for disposing of patient records under section 351 or for transferring patients from an about to be shut health care business to another health care business.
(9) The price of any goods that the debtor received within 20 days before the case commenced.
To learn more about the administrative fees in Chapter 7 bankruptcy, consult the Recovery Law Group at www.recoverylawgroup.com or on 888-297-6203.