August 29, 2017

Who Receives the Money Held By The Trustee When a Case is Dismissed?

Unfortunately, some Chapter 13 Bankruptcy cases are dismissed after they are confirmed/approved. This could be for various reasons, e.g. Debtor did not pay the Trustee Fees.

The Trustee holds moneys he/she receives to pay creditors in a separate account earmarked for Creditor payments throughout the case as well as Trustee fees and Administrative Claims.  When a case is dismissed and there are moneys left in the Trustee’s account for this case, the Debtor must be refunded this money.

The Trustee cannot disburse the remaining funds to anyone but the debtor.