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When and how are creditors paid by the Panel Trustee?

The Panel Trustee reviews the claims that are filed with the Court to determine if they should be allowed at the priority levels they have been claimed.  If the Panel Trustee believes a claim is incorrect, he will file an objection to the claim and notify the creditor of his objection.  If the creditor does not respond to the objection filed by the Trustee, the Panel Trustee will obtain an order from the Court allowing his/her objection.  If the Creditor requests a hearing, the Court will determine whether the Panel Trustee's objection will stand or not. 

The Panel Trustee will pay creditors based upon their priority. Administrative expenses under Chapter 7 are paid first.  This would include the Trustee, the Trustee's attorney, the Trustee's accountant, the Trustee's appraiser, the Trustee's auctioneer and Court costs.  Chapter 11 administrative claims are paid next.  Other claims are then paid in their respective order as follows: wage claims to the extent of $4,000; contributions to employment benefit plans; customer deposits to the extent of $1,800; claims for debts due a spouse for alimony or child support; secured taxes; priority taxes and unsecured claims.  Any excess funds remaining would be returned to the debtor.

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