Creditors didn't make a claim, what happens to the extra money from assets?

[firsttime]

If our creditors didn't make a claim and there are left over funds after the assets are sold and the trustee gets paid, do they just send some out to all creditors, or could we actually get money back from the sale of our assets?

[despritfreya]

If the Trustee pays all "allowed" claims in full (including interest) and there are funds left over, those funds will be returned to you. See 11 USC 726(a)(6)

Des.

[scooter6251]

If the Trustee pays all "allowed" claims in full (including interest) and there are funds left over, those funds will be returned to you. See 11 USC 726(a)(6)

Des.

Des is correct as usual. It happened to us and we got a check from the Trustee at the same time he issued payments to the "allowed claims"

[IBroke]

That's interesting.

So, how can I find out if a creditor made a claim? Do claims show up on PACER?

I'm asking because my mother has about 50 creditors and the "NOTICE FIXING DEADLINE TO FILE A PROOF OF CLAIM" showed up on PACER on June 16th and says that the deadline is September 19th. My mother is currently paying about $1,300 (in 4 installments, 1 left) to the trustee to buy back non-exempt household-goods and three days ago, the trustee mailed out a notification that - unless objected - the goods will be sold back to my mother on September 15th. I guess after that, funds could be distributed to creditors.

Would be nice though if no creditor filed a claim - so I was wondering if PACER would be the right source to check on that. So far, not a single indication of any claim showed up and considering the huge number of creditors, I find it hard to believe that nobody makes a claim. Is that common?

EDIT: Found it! There are indeed several claims on PACER - I just didn't check the right section..

[btbeme]

Hmmm... Interesting... Des, I know of a case where a settlement of about $20,000 was agreed to by the Trustee on a piece of property; yet the file has absolutely zero claims made except for those "legal fees" made by the Trustee's Attorney. To my nose, this smells funny.

Now... In my admittedly unlearned opinion, the settlement is WAAAAY above reasonable, and seeing how there are no claims filed, I am wondering how a Trustee and a TT Attorney will go about trying to absorb all of this settlement money down to the last cent... Is there a way that a settlement can essentially be "abandoned" and completely surrendered to the Trustee, with no option for a refund of the balance? I saw something that read "waiver of exemption" or something to that effect that seemed to state that the Debtor agrees to abandon all claims to any of the settlement...

Is there a way to challenge the TT and the TT atty's "costs" in administering said settlement?

[despritfreya]

.

. . I know of a case where a settlement of about $20,000 was agreed to by the Trustee on a piece of property; yet the file has absolutely zero claims made except for those "legal fees" made by the Trustee's Attorney. . . (S)eeing how there are no claims filed, I am wondering how a Trustee and a TT Attorney will go about trying to absorb all of this settlement money. . . Is there a way that a settlement can essentially be "abandoned" and completely surrendered to the Trustee, with no option for a refund of the balance? I saw something that read "waiver of exemption" or something to that effect that seemed to state that the Debtor agrees to abandon all claims to any of the settlement... Is there a way to challenge the TT and the TT atty's "costs" in administering said settlement?

I do not have an answer to your inquiry. I tried a quick case law search and was not able to find cases. My gut tells me that even if there are no claims filed, the Trustee and his attny are entitled to reasonable compensation for their efforts before funds are returned to the debtor. It is not the fault of the Trustee that creditors decided not to file claims. The Trustee was just doing his/her job and should be compensated for his/her efforts. At least that is how I look at it. A debtor in a solvent estate has standing to question the reasonableness of the Trustee’s fees but doing so necessarily will increase those fees as the Trustee will seek compensation for defending any objection thus it becomes a vicious circle.

Des.

[frogger]

.
A debtor in a solvent estate has standing to question the reasonableness of the Trustee’s fees but doing so necessarily will increase those fees as the Trustee will seek compensation for defending any objection thus it becomes a vicious circle.

Des.

You can bet that this would happen. And the trustee is probably going to hire him or her self as the attorney to defend the trustee. Keep it in the family and keep it going in a circle for as long as you want to continue to have your money spent.

[AngelinaCat]

You can bet that this would happen. And the trustee is probably going to hire him or her self as the attorney to defend the trustee. Keep it in the family and keep it going in a circle for as long as you want to continue to have your money spent.

No, I don't think the trustee would hire him/herself as the attorney. The trustee will hire another attorney to investigate matters. This happened during the course of our BK.

[frogger]

No, I don't think the trustee would hire him/herself as the attorney. The trustee will hire another attorney to investigate matters. This happened during the course of our BK.

Trust me 'hub. The trustee has no problem hiring him/her self as the attorney to represent the estate.

[btbeme]

My grandfather is proven correct, yet again.

[AngelinaCat]

Trust me 'hub. The trustee has no problem hiring him/her self as the attorney to represent the estate.

This isn't 'Hub. T'is AC.

[despritfreya]

Trustees in AZ who happen to be attnys hire their own firms in the ordinary course. The judges do not deem there to be a conflict since all fees must be approved by the Court.

Des.

[btbeme]

Sounds like the move from Trustee to a Congressman should be a smooth and familiar transition.

I say this will all due respect should any Trustee be reading and willing to reopen my case...

[frogger]

This isn't 'Hub. T'is AC.

It appears that I'm blind my dear.

[CarolynTIXE]

The trustee is bound to perform certain duties. Keep in mind here that a trustee receives MINIMAL compensation for each case that is filed (we're talking less than $100), yet perform a boatload of work for that money and often has other staff members helping with a case. You can read the laundry list of the duties a trustee performs on every case in the Handbook for Chapter 7 Trustees. However, if those duties need to be expanded to serve the best interests of the estate, the trustee can act as an accountant or attorney for the estate.

Per section 327 of the BK Code, the trustee has the right to seek court approval to hire professionals to assist or represent him/her. Per section 330, those professionals are entitled to compensation for doing so.

As for hiring their own firm, sure this happens. Generally, the firm must be "disinterested", having no adverse interest or conflict of interest in the estate. This happens often as many attorneys within a practice keep independent clientele.

All compensation to professionals is closely monitored by the Office of the U.S. Trustee. Professionals do not receive a blank check for services rendered. It seems costly to the estate, but in the long run the goal is protect the estate and bring the case to a fair conclusion.