How to Pay a Bankruptcy Trustee

by Larry Parr ; Updated July 27, 2017

There are several types of bankruptcy in the United States, Chapter 7 and Chapter 13 two of the more commonly used. Under Chapter 7, bankruptcy a debtor seeks to have most (if not all) debts wiped clean. Under a Chapter 7 bankruptcy, the trustee decides whether the debtor has any assets that can be sold to at least partially repay creditors. Under a Chapter 13 bankruptcy, the debtor files a plan for repaying all (or part) of the debts owed. Under Chapter 13, the debtor makes payments to the creditors through the trustee, who oversees the entire process. The way the trustee is paid depends on whether the debtor files a Chapter 7 or Chapter 13 bankruptcy.

Step 1

Decide which type of bankruptcy is right for you: Chapter 7, which clears all debts, or Chapter 13, under which you restructure and repay all or part of your debts. Consult a bankruptcy attorney if you are unsure which type is right for you.

Step 2

File the proper paperwork with the court and pay your filing fee. In a Chapter 7 bankruptcy, your trustee is paid a fee out of your filing fee. This fee is paid by the court.

Step 3

Relinquish assets that the trustee deems must be sold to (partially) repay debtors. The trustee will receive a fixed portion of the assets from the sale. The trustee will be paid directly by the court.

Step 4

Create a repayment plan if filing a Chapter 13 bankruptcy. Make your payments in full and on time to the trustee every month until your obligations are fulfilled. The trustee receives a portion of your payment each month. The payment to the trustee is made directly by the court.

About the Author

Larry Parr has been a full-time professional freelance writer for more than 30 years. For 25 years he wrote cartoons for television, everything from "Smurfs" to "Spider-Man." Today Parr train dogs and write articles on a variety of topics for websites worldwide.