Case Type:
Case Status:
22-1004 (10th Circuit, Jan 18,2023) Published
When a chapter 13 plan is not confirmed and the case dismissed, the chapter 13 trustee has no right to keep the fee from pre-confirmation payments received by the trustee. This result arises from 11 U.S.C. § 1326(a)(2), which directs chapter 13 trustees to "return [payments received before a plan is confirmed]… to the debtor", from 28 U.S.C. § 586(e)(2). and from the treatment of trustee's fees in chapter 11 and 12 cases (11 U.S.C. §§ 1194(a)(1) and 1226(a) direct subchapter V and chapter 12 trustees to return plan payments to the debtor after paying the trustee's fee).
Procedural context:
A former chapter 13 debtor's trustee appealed an order of the district court that reversed a bankruptcy court's order that held that a chapter 13 trustee was entitled to fees even if no chapter 13 plan had been confirmed.
Daniel Doll filed a petition for relief under chapter 13 in November 2017. He proposed four plans over the following year and a half. The chapter 13 trustee, Doll's former spouse, and his former spouse's attorney objected to confirmation. After four bites at the apple, Doll declined to file another plan, and his case was dismissed. By the time Doll's chapter 13 case was dismissed, he had paid $29,900 to the chapter 13 trustee. The trustee paid $19,800 to Doll's bankruptcy attorney, more than $7,5000 to the Colorado Department of Revenue for some of Doll's taxes, and retained $2,596.70 as the trustee's fee. Doll filed a motion to compel the trustee to disgorge the trustee's fee. The bankruptcy court denied Doll's motion to disgorge. Doll appealed, and the district court reversed.

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