What Are ‘7’ Trustees Paid When the Case Converts to ‘13’ Before Distributions?

June 4, 2024

What Are ‘7’ Trustees Paid When the Case Converts to ‘13’ Before Distributions?

Courts have at least six theories about compensation for chapter 7 trustees for valuable services rendered when the case converts to chapter 13 before the trustee has made any distributions.

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Opinion Link

View Opinion

https://abi-opinions.s3.amazonaws.com/Cummings.pdf

Case Details

Case Citation

In re Cummings, 23-10321 (Bankr. D.N.M. May 22, 2024).

Case Name

In re Cummings

Case Type

Consumer

Court

10th Circuit

New Mexico

Bankruptcy Tags

Professional Compensation/Fees

Consumer Bankruptcy

Comments

Submitted by Donald Lassman on June 9, 2024

Curious what the result would have been had the trustee not maintained contemporaneous time records of the work performed as Chapter 7 Trustee. Is the takeaway here that Chapter 7 Trustee's should maintain time records in all cases in the event that a case is later converted to another Chapter? I suspect this would deviate from normal practice for most trustees since it is unlikely trustees are thinking about case conversion when administering a chapter 7 case and Trustees are most frequently compensated under Section 326 which is a commission and, unlike Section 330, does not contemplate maintaining and submitted detailed time records.