Adam M. Goodman, Chapter 13 Trustee v. Daniel Richard Doll

Standing trustees ensure the impartial, efficient administration of cases arising under Chapter 13 of the Bankruptcy Code. Such administration includes reviewing debtors’ proposed debt-repayment plans and advising courts on whether to confirm (approve) these plans. Standing trustees perform this quasijudicial work (and more) in hundreds of Chapter 13 cases at a time. Doing this work requires trustees to maintain a staff and incur hundreds of thousands of dollars in yearly administrative expenses. The Bankruptcy Code funds these costs through a debtor-paid user fee. Before and after confirmation of their plans, Chapter 13 debtors must make regular monthly payments under their plans to the trustee for eventual disbursal by the trustee to the debtor’s creditors. 11 U.S.C. §1326(a)(1)(A). The Code dictates that standing trustees “shall collect” a percentagebased user fee “from all payments” that the trustee “receive[s] . . . under plans.” 28 U.S.C. §586(e)(2). If “a plan is not confirmed,” trustees “shall return” to the debtor any payments “not previously paid” and “not yet due and owing to creditors” minus unpaid administrative claims. 11 U.S.C. §1326(a)(2). The question presented is: Whether the Bankruptcy Code directs standing trustees to collect a user fee from debtors in every Chapter 13 case the trustee administers, including cases in which a debtor’s plan is not confirmed.