The Chapter 13 trustee fee percentage is capped by federal law at 10 percent of every dollar you pay into your repayment plan, and most judicial districts set their rate below that ceiling.1Office of the Law Revision Counsel. 28 U.S. Code 586 – Duties; Supervision by Attorney General Actual rates typically fall somewhere between about 4 percent and 10 percent, recalculated each year based on the cost of running the local trustee’s office. The fee comes out of each monthly payment before anything reaches your creditors, so it directly affects how much you have to pay in for the plan to work.
Who Sets the Rate
The Attorney General sets the percentage for each standing Chapter 13 trustee after consulting with the local United States Trustee. The number is driven by two things: the trustee’s capped annual compensation and the actual necessary expenses of the trustee’s office. Whatever percentage results applies uniformly to every Chapter 13 case that trustee administers during the period.1Office of the Law Revision Counsel. 28 U.S. Code 586 – Duties; Supervision by Attorney General
The 10 percent statutory ceiling is hard. A district cannot go above it for a standard Chapter 13 case.
What Districts Actually Charge
Published data from the U.S. Trustee Program shows rates as low as 3.6 percent in some districts and as high as the full 10 percent in others.2U.S. Trustee Program (Dept. of Justice). Administrative Expenses Multiplier Districts with heavier caseloads generally land lower because fixed office costs get spread across more debtors. Smaller districts often sit closer to the cap for the same reason in reverse.
To find your district’s current rate, contact the standing Chapter 13 trustee’s office where you plan to file, or ask your bankruptcy attorney. The U.S. Trustee Program also publishes administrative expense multiplier schedules on the Department of Justice website that list the percentage for every judicial district, along with a lookup tool if you’re not sure which district you’re in.2U.S. Trustee Program (Dept. of Justice). Administrative Expenses Multiplier
How the Fee Comes Out of Your Payment
The percentage applies to your entire gross monthly plan payment, not just the piece meant for unsecured creditors. Every dollar routed through the trustee is reduced by the fee before distribution.
A concrete example. If your plan payment is $1,200 a month and the local rate is 7 percent, the trustee keeps $84 and sends the remaining $1,116 out to creditors and other claims. That happens every month for the life of the plan.
Some attorneys deliberately build plans using the 10 percent maximum even when the current district rate is lower. The cushion protects the plan if the fee is adjusted upward partway through, which would otherwise force an amended plan.
How the Fee Changes What You Must Pay In
Because the fee is skimmed off the top, your creditors collectively receive less than the amount you pay. The plan has to be sized to close that gap. Priority claims like back taxes and domestic support obligations have to be paid in full through the plan.3Office of the Law Revision Counsel. 11 U.S. Code 1322 – Contents of Plan Secured creditors generally have to receive at least the value of their collateral. General unsecured creditors get what’s left.
The math is straightforward. Suppose creditors need to receive $25,000 over the life of your plan and the district’s fee is 8 percent. Divide the amount creditors need by (1 minus the fee): $25,000 รท 0.92 = about $27,174 in total plan payments. The trustee takes roughly $2,174, and the full $25,000 reaches creditors.
Attorney fees paid through the plan flow through the trustee too, which increases the total dollars the trustee handles and therefore the total fee collected across the life of the case. That’s one more reason the percentage has to be factored into every line of the plan.
Where the Fee Money Goes
The percentage is not the trustee’s personal take-home. Federal law caps the standing trustee’s individual compensation at the pay rate for Level V of the Executive Schedule, plus benefits comparable to what a federal employee at that pay grade receives. Anything collected above the trustee’s allowed compensation and the actual necessary expenses of the office is turned over to the United States Trustee System Fund at the Department of Justice.1Office of the Law Revision Counsel. 28 U.S. Code 586 – Duties; Supervision by Attorney General So the percentage funds office operations, and the government recaptures the excess.
Alabama and North Carolina Work Differently
Cases filed in any of the six judicial districts in Alabama and North Carolina are not administered by the U.S. Trustee Program. They fall under Bankruptcy Administrators appointed by the federal judiciary, and the administrative expense schedules for those districts are issued separately and published on the federal judiciary’s website rather than the Department of Justice site.2U.S. Trustee Program (Dept. of Justice). Administrative Expenses Multiplier If you’re filing in one of those states, direct fee questions to the Bankruptcy Administrator for your district.