Bankruptcy Forms: Filing Bankruptcy Chapter 7 Bankruptcy Software Chapter 13

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TITLE 11–BANKRUPTCY

CHAPTER 3–CASE ADMINISTRATION

Sub Chapter II –Officers

Sec. 326. Limitation on compensation of trustee

    (a) In a case under chapter 7 or 11, the court may allow reasonable 
compensation under section 330 of this title of the trustee for the 
trustee's services, payable after the trustee renders such services, not 
to exceed 25 percent on the first $5,000 or less, 10 percent on any 
amount in excess of $5,000 but not in excess of $50,000, 5 percent on 
any amount in excess of $50,000 but not in excess of $1,000,000, and 
reasonable compensation not to exceed 3 percent of such moneys in excess 
of $1,000,000, upon all moneys disbursed or turned over in the case by 
the trustee to parties in interest, excluding the debtor, but including 
holders of secured claims.
    (b) In a case under chapter 12 or 13 of this title, the court may 
not allow compensation for services or reimbursement of expenses of the 
United States trustee or of a standing trustee appointed under section 
586(b) of title 28, but may allow reasonable compensation under section 

330 of this title of a trustee appointed under section 1202(a) or 
1302(a) of this title for the trustee's services, payable after the 
trustee renders such services, not to exceed five percent upon all 
payments under the plan.
    (c) If more than one person serves as trustee in the case, the 
aggregate compensation of such persons for such service may not exceed 
the maximum compensation prescribed for a single trustee by subsection 
(a) or (b) of this section, as the case may be.
    (d) The court may deny allowance of compensation for services or 
reimbursement of expenses of the trustee if the trustee failed to make 
diligent inquiry into facts that would permit denial of allowance under 
section 328(c) of this title or, with knowledge of such facts, employed 
a professional person under section 327 of this title.

(Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2562; Pub. L. 98-353, title III, 
Sec. 430(a), (b), July 10, 1984, 98 Stat. 369; Pub. L. 99-554, title II, 
Sec. 209, Oct. 27, 1986, 100 Stat. 3098; Pub. L. 103-394, title I, 
Sec. 107, Oct. 22, 1994, 108 Stat. 4111.)


                      Historical and Revision Notes

                         legislative statements

    Section 326(a) of the House amendment modifies a provision as 
contained in H.R. 8200 as passed by the House. The percentage limitation 
on the fees of a trustee contained in the House bill is retained, but no 
additional percentage is specified for cases in which a trustee operates 
the business of the debtor. Section 326(b) of the Senate amendment is 
deleted as an unnecessary restatement of the limitation contained in 
section 326(a) as modified. The provision contained in section 326(a) of 
the Senate amendment authorizing a trustee to receive a maximum fee of 
$150 regardless of the availability of assets in the estate is deleted. 
It will not be necessary in view of the increase in section 326(a) and 
the doubling of the minimum fee as provided in section 330(b).
    Section 326(b) of the House amendment derives from section 326(c) of 
H.R. 8200 as passed by the House. It is a conforming amendment to 
indicate a change with respect to the selection of a trustee in a 
chapter 13 case under section 1302(a) of title 11.


                        senate report no. 95-989

    This section is derived in part from section 48c of the Bankruptcy 
Act [section 76(c) of former title 11]. It must be emphasized that this 
section does not authorize compensation of trustees. This section simply 
fixes the maximum compensation of a trustee. Proposed 11 U.S.C. 330 
authorizes and fixes the standard of compensation. Under section 48c of 
current law, the maximum limits have tended to become minimums in many 
cases. This section is not intended to be so interpreted. The limits in 
this section, together with the limitations found in section 330, are to 
be applied as outer limits, and not as grants or entitlements to the 
maximum fees specified.
    The maximum fee schedule is derived from section 48c(1) of the 
present act [section 76(c)(1) of former title 11], but with a change 
relating to the bases on which the percentage maxima are computed. The 
maximum fee schedule is based on decreasing percentages of increasing 
amounts. The amounts are the amounts of money distributed by the trustee 
to parties in interest, excluding the debtor, but including secured 
creditors. These amounts were last amended in 1952. Since then, the cost 
of living has approximately doubled. Thus, the bases were doubled.
    It should be noted that the bases on which the maximum fee is 
computed includes moneys turned over to secured creditors, to cover the 
situation where the trustee liquidates property subject to a lien and 
distributes the proceeds. It does not cover cases in which the trustee 
simply turns over the property to the secured creditor, nor where the 
trustee abandons the property and the secured creditor is permitted to 
foreclose. The provision is also subject to the rights of the secured 
creditor generally under proposed section 506, especially 506(c). The 
$150 discretionary fee provision of current law is retained.
    Subsection (b) of this section entitles an operating trustee to a 
reasonable fee, without any limitation based on the maximum provided for 
a liquidating trustee as in current law, Bankruptcy Act Sec. 48c(2) 
[section 76(c)(2) of former title 11].
    Subsection (c) [enacted as (b)] permits a maximum fee of five 
percent on all payments to creditors under a chapter 13 plan to the 
trustee appointed in the case.
    Subsection (d) [enacted as (c)] provides a limitation not found in 
current law. Even if more than one trustee serves in the case, the 
maximum fee payable to all trustees does not change. For example, if an 
interim trustee is appointed and an elected trustee replaces him, the 
combined total of the fees payable to the interim trustee and the 
permanent trustee may not exceed the amount specified in this section. 
Under current law, very often a receiver receives a full fee and a 
subsequent trustee also receives a full fee. The resultant ``double-
dipping'', especially in cases in which the receiver and the trustee are 
the same individual, is detrimental to the interests of creditors, by 
needlessly increasing the cost of administering bankruptcy estates.
    Subsection (e) [enacted as (d)] permits the court to deny 
compensation to a trustee if the trustee has been derelict in his duty 
by employing counsel, who is not disinterested.


                               Amendments

    1994--Subsec. (a). Pub. L. 103-394 substituted ``25 percent on the 
first $5,000 or less, 10 percent on any amount in excess of $5,000 but 
not in excess of $50,000, 5 percent on any amount in excess of $50,000 
but not in excess of $1,000,000, and reasonable compensation not to 
exceed 3 percent of such moneys in excess of $1,000,000'' for ``fifteen 
percent on the first $1,000 or less, six percent on any amount in excess 
of $1,000 but not in excess of $3,000, and three percent on any amount 
in excess of $3,000''.
    1986--Subsec. (b). Pub. L. 99-554 amended subsec. (b) generally, 
substituting ``under chapter 12 or 13 of this title'' for ``under 
chapter 13 of this title'', ``expenses of the United States trustee or 
of a standing trustee appointed under section 586(b) of title 28'' for 
``expenses of a standing trustee appointed under section 1302(d) of this 
title'', and ``under section 1202(a) or 1302(a) of this title'' for 
``under section 1302(a) of this title''.
    1984--Subsec. (a). Pub. L. 98-353, Sec. 430(a), substituted ``and 
three percent on any amount in excess of $3000'' for ``three percent on 
any amount in excess of $3,000 but not in excess of $20,000, two percent 
on any amount in excess of $20,000 but not in excess of $50,000, and one 
percent on any amount in excess of $50,000''.
    Subsec. (d). Pub. L. 98-353, Sec. 430(b), amended subsec. (d) 
generally. Prior to amendment, subsec. (d) read as follows: ``The court 
may deny allowance of compensation for services and reimbursement of 
expenses of the trustee if the trustee--
        ``(1) failed to make diligent inquiry into facts that would 
    permit denial of allowance under section 328(c) of this title; or
        ``(2) with knowledge of such facts, employed a professional 
    person under section 327 of this title.''


                    Effective Date of 1994 Amendment

    Amendment by Pub. L. 103-394 effective Oct. 22, 1994, and not 
applicable with respect to cases commenced under this title before Oct. 
22, 1994, see section 702 of Pub. L. 103-394, set out as a note under 
section 101 of this title.


                    Effective Date of 1986 Amendment

    Effective date and applicability of amendment by Pub. L. 99-554 
dependent upon the judicial district involved, see section 302(d), (e) 
of Pub. L. 99-554, set out as a note under section 581 of Title 28, 
Judiciary and Judicial Procedure.


                    Effective Date of 1984 Amendment

    Amendment by Pub. L. 98-353 effective with respect to cases filed 90 
days after July 10, 1984, see section 552(a) of Pub. L. 98-353, set out 
as a note under section 101 of this title.


 References in Subsection (b) Temporarily Deemed To Include Additional 
                               References

    Until the amendments made by subtitle A (Secs. 201 to 231) of title 
II of Pub. L. 99-554 become effective in a district and apply to a case, 
for purposes of such case any reference in subsec. (b) of this section--
        (1) to chapter 13 of this title is deemed to be a reference to 
    chapter 12 or 13 of this title,
        (2) to section 1302(d) of this title is deemed to be a reference 
    to section 1302(d) of this title or section 586(b) of Title 28, 
    Judiciary and Judicial Procedure, and
        (3) to section 1302(a) of this title is deemed to be a reference 
    to section 1202(a) or 1302(a) of this title,
see section 302(c)(3)(A), (d), (e) of Pub. L. 99-554, set out as an 
Effective Date note under section 581 of Title 28.

                  Section Referred to in Other Sections

    This section is referred to in sections 330, 557 of this title.



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