Filing Chapter 7

• When you file a Chapter 7 bankruptcy petition, the clerk of the bankruptcy court transmits your petition and schedules to the U.S. Trustee. The U.S. Trustee then appoints a local bankruptcy trustee to administer your Chapter 7 case. The bankruptcy trustee has the task of liquidating your nonexempt property and using the cash earned to pay your creditors. The bankruptcy trustee also conducts the first meeting of creditors where she asks you questions about the petition and schedules you have filed. You must answer these questions under oath.
  
  

Liquidating Assets

• If the bankruptcy trustee finds any assets that you own that he can sell to pay your creditors, he will take those assets and sell them. The bankruptcy court allows reasonable compensation for the trustee's services in a Chapter 7 bankruptcy case.
  
  

Trustee Compensation

• The bankruptcy court defines "reasonable compensation" as up to 25 percent of the first $5,000 recovered for creditors; up to 10 percent of any amount recovered between $5,000 and $50,000; up to 5 percent of any amount recovered between $50,000 and $1 million; and up to 3 percent of any amount recovered over $1 million. Other than compensation the bankruptcy trustee receives after she sells a debtor's assets, the bankruptcy trustee only receives $60 per case. In most cases, the bankruptcy trustee only receives this $60 fee with no other compensation, because most Chapter 7 cases have no assets to be liquidated. (All figures are as of June 2011.)
  
  

Bankruptcy Court Fees

• With the exception of your attorney's fees, the only payment you must make is to the bankruptcy court that will be handling your case. You must pay a total fee of $299 when filing your bankruptcy petition. The bankruptcy court charges a $245 filing fee, a $39 miscellaneous administrative fee and a $15 trustee surcharge, as of June 2011.
  
  If you cannot make this payment, apply to have the court allow you to pay the $299 fee in installments. Obtain Official Form 3B, the Application For Waiver Of the Chapter 7 Filing Fee, from the U.S. Courts website, and file it with the required bankruptcy schedules. If you cannot make the payment in installments and your income falls below 150 percent of the poverty level, the bankruptcy court may waive the requirement that you pay the fee.