In a Chapter 7 bankruptcy, the trustee fee is set by federal statute as a sliding-scale percentage of the money the trustee distributes to creditors from liquidated assets. If nothing gets liquidated and nothing gets distributed, which is how roughly 95% of Chapter 7 cases end, the trustee receives a flat $60 that comes out of the filing fee you already paid. If the trustee does sell non-exempt property, the fee is calculated in tiers on the amount disbursed, capped at 25% on the first $5,000 and dropping from there.
The Statutory Sliding Scale
The cap on trustee compensation is set by 11 U.S.C. § 326. It works in brackets, and each rate applies only to the dollars inside its range:1Office of the Law Revision Counsel. 11 U.S. Code 326 – Limitation on Compensation of Trustee
- 25% on the first $5,000 disbursed
- 10% on amounts above $5,000 up to $50,000
- 5% on amounts above $50,000 up to $1,000,000
- 3% on anything above $1,000,000
Two things about that scale are easy to miss. The percentages are ceilings, not automatic awards; the court sets the actual fee and can approve less than the maximum.2Office of the Law Revision Counsel. 11 U.S. Code 330 – Compensation of Officers And the fee is calculated on money “disbursed or turned over” to parties in interest, which includes secured creditors but not anything returned to you.
A Worked Example
Say the trustee liquidates non-exempt property and distributes $30,000 to creditors. The maximum fee stacks up like this:
- First $5,000 at 25% = $1,250
- Next $25,000 at 10% = $2,500
- Total maximum fee: $3,750
That is 12.5% of the total distribution. The effective rate falls as the estate grows. A $100,000 distribution produces a maximum fee of $8,250, or 8.25%, because most of the dollars fall inside the 5% tier. The structure gives trustees a strong incentive to pursue small pockets of value and less reason to chase very large estates at the same rate.
Why Most Debtors Pay Only $60
The sliding scale never engages if there is nothing to distribute. When the trustee finds no non-exempt property worth selling, the case is reported as a no-asset case and the trustee collects a flat $60: a $45 base payment plus a $15 surcharge set by the Judicial Conference, both drawn from your filing fee.2Office of the Law Revision Counsel. 11 U.S. Code 330 – Compensation of Officers3United States Courts. Bankruptcy Court Miscellaneous Fee Schedule
Whether your case stays in that no-asset lane comes down to exemptions. Exemptions let you shield specific categories and dollar amounts of property from liquidation. Some states let you pick between the federal exemption list and the state list; others require you to use the state list only.4Justia Law. Federal Bankruptcy Exemptions Commonly protected items include equity in a primary home, retirement accounts, a vehicle up to a set value, and household goods. Anything above your available exemptions is fair game for the trustee, and that is exactly what turns a no-asset case into an asset case with a percentage fee attached.
There is also a practical filter. Administrative expenses, including the trustee’s own fee, get paid before general creditor claims under 11 U.S.C. § 507.5Office of the Law Revision Counsel. 11 U.S. Code 507 – Priorities A trustee generally will not sell an asset unless the expected proceeds meaningfully exceed the cost of the sale plus the fee. If your used car would net $2,000 after $1,500 in administrative overhead, the trustee will usually abandon it.
How the Fee Gets Paid
You do not write the trustee a check on top of everything else. In a no-asset case, the $60 is already inside your filing fee. In an asset case, the fee is drawn from the distribution itself, off the top, before creditors are paid in priority order. From your side of the ledger, the money that funds the fee is money you were losing anyway when the non-exempt property was liquidated.
Transfers That Can Enlarge the Pool
The fee calculation applies to whatever the trustee actually distributes, and that pool is not limited to property you still own on filing day. A trustee can claw back certain pre-filing transfers, and any recovered dollars feed into the same sliding scale.
Preferential Payments
If you paid one creditor ahead of others shortly before filing, the trustee can recover it. The lookback is 90 days for ordinary creditors and one year for insiders such as family members or business partners.6Office of the Law Revision Counsel. 11 U.S. Code 547 – Preferences Repaying your brother $5,000 two months before filing is the textbook case.
Fraudulent Transfers
Transfers made to keep assets from creditors, or transfers where you got far less than fair value, can be unwound within a two-year federal lookback.7Office of the Law Revision Counsel. 11 U.S. Code 548 – Fraudulent Transfers and Obligations State fraudulent transfer statutes often reach further back, and the trustee can use whichever window is longer. Selling a boat to a friend for $500 eighteen months before filing is the kind of transaction that gets undone.
What Else Filing Chapter 7 Costs
The trustee fee is only one line in the total. The court filing fee is $338, which itself contains a $245 filing fee, a $78 administrative fee, and the $15 trustee surcharge.8Office of the Law Revision Counsel. 28 U.S. Code 1930 – Bankruptcy Fees3United States Courts. Bankruptcy Court Miscellaneous Fee Schedule Two required financial education courses typically run $10 to $50 each, with waivers available for low-income filers.9Office of the Law Revision Counsel. 11 U.S. Code 109 – Who May Be a Debtor Attorney fees are the largest variable, generally $1,000 to $3,000 depending on the complexity of the case and the local market.