Compensation for Bankruptcy

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The famed Bankruptcy Reform Act of 1994 brought amendments in the responsibilities of the United States Trustees (28 U.S.C. 586(a)(3)(A)) to offer, wherever necessary and deemed fit, the trustees will review the various applications received for compensations and above all for reimbursement of expenses (section 330 of the Bankruptcy Code, 11 U.S.C. 101, et seq. (“Code”)). The guidelines were adopted by the United States Trustees’ Executive Office.

The guidelines

The Guidelines in all the cases starting from the 22nd of October, 1994 will be used by the United States Trustees. The guidelines are not at all intended to supplant the court rules (local) and must be read as harmonizing with the set procedures in the local rules. The guidelines cannot restrict the power (discretionary) of the United States Trustee to ask for any further information that is necessary for the proper reviewing of any particular application or kind of application or any information that is being supplied by the United States Trustee in carrying out prosecutorial or investigatory power and authority of the United States or any state. The guidelines also cannot stop the Trustee in determining and deciding whether to even file the comments or applications for objections.

What to mention in the applications

The applications must have enough details to demonstrate fulfillment with the basic standards that have been set in11 U.S.C. § 330. Adequate information must be provided with. It is very important to provide with all the details so that the Court can view and review the case without any hassle. All the detailed information must be supplied with in each and every fee application. The exact and proper mentioning of the date of the petition about the bankruptcy, the date order that approve employment and also the identity of the party in question must be mentioned without fail. The date of the commencement of the service must be mentioned in the application and also if the person in question (applicant) is asking for compensation under the condition of the Bankruptcy Code in any other Code (other than section 330).

Terms and conditions of the compensation and employment, limitations on the fees, the proper source of compensation must be mentioned. The names and the rates (hourly) of all the professionals and paraprofessionals (related to the applicant) by whom the time was billed must be mentioned.

The application is final or interim; the dates of earlier reimbursement of expenses with the amounts that have been asked for if the amounts are disallowed or allowed.

Reference: http://www.law.cornell.edu/uscode/text/11/331

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