Trustee in Bankruptcy Court Bond - Maryland in All States
Table of Contents
Brief Summary
A bankruptcy trustee in Maryland does not legally qualify for a case until the bond is on file, and federal law gives you only seven days after selection to get it there. We write trustee bonds in favor of the United States in the amount the U.S. Trustee sets, so you can file on time and start work on the estate.
Under 11 U.S.C. 322, a person selected as trustee in a chapter 7, 11, 12 or 13 case qualifies only by filing a bond in favor of the United States with the court within seven days after selection and before starting official duties. In the District of Maryland, the U.S. Trustee for Region 4 sets the bond amount and decides whether the surety is sufficient. The bond guarantees faithful performance of the trustee's official duties.
We can help with all All States bonds!
How to Apply for a Trustee in Bankruptcy Court Bond:
- Get the required bond amount, or confirmation that a blanket bond covers you, from the U.S. Trustee Region 4 office handling the case.
- Have the case name, case number and chapter ready.
- Complete the bond application with your personal information for the credit review.
- Pay the premium and sign the bond.
- File the bond with the U.S. Bankruptcy Court for the District of Maryland within seven days after your selection, before you start official duties.
Detailed Information About the All States Trustee in Bankruptcy Court Bond:
The deadline most trustees worry about
Section 322(a) of the Bankruptcy Code says a person selected under sections 701, 702, 703, 1104, 1163, 1183, 1202 or 1302 qualifies as trustee only if the bond is filed with the court before seven days after selection, and before official duties begin. That covers interim and permanent chapter 7 trustees, chapter 11 and subchapter V trustees, railroad reorganization trustees, and standing chapter 12 and 13 trustees. Miss the window and you have not qualified for the case.
Who sets the amount
No statute fixes a dollar figure. Under section 322(b)(2), the United States Trustee decides both the amount of the bond and whether the surety is sufficient. For bankruptcy cases filed in Maryland, that is the U.S. Trustee for Region 4, which has offices in Baltimore and Greenbelt. The amount usually tracks the money and property the trustee will control in the estate, so ask the U.S. Trustee's office for the required figure before we issue the bond.
Blanket bonds
Bankruptcy Rule 2010(a) lets the U.S. Trustee authorize a single blanket bond in favor of the United States. One blanket bond can cover one trustee serving in many cases, or many trustees each serving in a different case. Panel and standing trustees often work under this kind of bond. A trustee appointed to a single case may need an individual bond instead.
Claims on the bond
Rule 2010(b) lets any party in interest sue on the bond in the name of the United States for the benefit of whoever was harmed by the trustee's breach. Section 322(d) bars any such proceeding started more than two years after the trustee was discharged. Under section 322(c), the trustee is not personally liable, and the bond does not answer, for penalties or forfeitures the debtor incurred.
The U.S. Trustee serving as trustee in its own right does not need to post this bond.
Eligibility and Requirements for an All States Trustee in Bankruptcy Court Bond:
- Bond runs in favor of the United States.
- Conditioned on faithful performance of the trustee's official duties under 11 U.S.C. 322(a).
- Amount and sufficiency of the surety set by the United States Trustee.
- Surety acceptable to the U.S. Trustee.
- Personal credit review of the trustee. Larger estates may need financial statements as well.
All States Trustee in Bankruptcy Court Bond FAQs:
Section 322(a) requires the bond to be filed with the court before seven days after your selection and before you begin official duties.
The United States Trustee sets the amount under 11 U.S.C. 322(b)(2). In Maryland that is the Region 4 office. The figure generally reflects the assets you will control, so confirm it with that office before the bond is issued.
Yes, if the U.S. Trustee authorizes a blanket bond under Bankruptcy Rule 2010(a). A blanket bond can cover one trustee in several cases or several trustees in different cases.
Any party in interest can bring a proceeding in the name of the United States for the benefit of the party harmed by the trustee's breach. It must be started within two years after the trustee is discharged.
It is a percentage of the bond amount set by the U.S. Trustee. The rate depends on the size of the bond and the trustee's credit and experience. We quote it once you apply.
