If you file a chapter 13 bankruptcy in Oregon, a person called a "Trustee" is assigned to your case. One of the main jobs of the Trustee is to accept/collect your monthly chapter 13 payments and distribute them to your creditors.
I get a lot of questions for clients who are curious as to how the Chapter 13 trustee is compensated. Essentially, for each dollar that the Trustee distributes they will receive a percentage of that payment. The percentage varies, based on the Trustee's budget, but will generally range from 2% to 7% or so. Their commission can never be over 10% by law.
Although the Trustee is a private company, they are contracted by the Federal Government, and must submit very detailed budgeting reports to the United States Trustee and conform with certain guidelines to ensure that they can operate effectively, but also maintain a fair commission structure. Simply put, they are not allowed to increase their commission on your chapter 13 payments to make a larger profit for themselves.
For more information about the standing Chapter 13 Trustee for the Portland, OR and surrounding areas, visit www.portland13.com.
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