Do administrative expenses come out of my pocket?

Not directly in a Chapter 7 case, where allowed administrative expenses are generally paid from estate assets the trustee collects. In a Chapter 13 case, the trustee may pay them through distributions under a confirmed plan (Bankr. D. Haw. LBR 3001-2), which is funded by plan payments. Court filing and administrative fees are separate and are paid to the clerk.

Are trustee and attorney fees really paid first?

They rank high, but "first" is imprecise. Compensation and reimbursement awarded to court-approved professionals is an administrative expense under 11 U.S.C. § 503(b)(2), and 11 U.S.C. § 507(a)(2) generally places allowed administrative expenses second among unsecured claims. A narrow trustee carve-out in 11 U.S.C. § 507(a)(1)(C) can come ahead of domestic support obligation claims in defined circumstances.

What is a section 503(b) claim?

It is a request for payment of an administrative expense allowed under 11 U.S.C. § 503(b). An entity files a request under 11 U.S.C. § 503(a), and the court allows the expense after notice and a hearing. Districts set the form and timing by local rule, such as M.D. Fla. LBR 3071-1 and Bankr. D.S.D. R. 2016-4, which requires itemization and a statement of the statutory basis.

Can an administrative expense be denied?

Yes. The court decides allowance after notice and a hearing under 11 U.S.C. § 503(b), and a request filed after a local deadline may be denied administrative expense treatment (D. Mass. LBR 3002-1). Certain back pay is allowable only if the court makes the findings described in 11 U.S.C. § 503(b)(1)(A)(ii). Denial does not necessarily end the matter, since local rules may preserve other claim rights.

Does state law change what counts as an administrative expense?

No. This category is federal, defined by 11 U.S.C. § 503 and ranked by 11 U.S.C. § 507(a)(2), so it does not change from state to state. What does change is local procedure — the application form, service requirements, and deadlines set by each bankruptcy court's local rules. Find the court that governs your case to see which local rules apply.

Can anything be paid ahead of administrative expenses?

Yes, in defined situations. Under 11 U.S.C. § 364(c)(1), a court may authorize the trustee to obtain credit with priority over any or all administrative expenses of the kind specified in 11 U.S.C. § 503(b). And 11 U.S.C. § 507(a)(1)(C) places certain trustee administrative expenses ahead of domestic support obligation claims, to the extent the trustee administers assets otherwise available for those claims.

Fundamentals

Administrative expenses in bankruptcy

Administrative expenses are the costs of running a bankruptcy case after it is filed: the actual, necessary costs of preserving the estate, plus court-approved compensation for the trustee and professionals. Under 11 U.S.C. § 503(b) a court allows them after notice and a hearing, and 11 U.S.C. § 507(a)(2) generally places them second in the payment order, ahead of ordinary unsecured claims.

Key points

An administrative expense is a cost of administering the case, not a debt the person owed before filing.
11 U.S.C. § 503(b) lists what can be allowed, including the costs of preserving the estate and compensation awarded to court-approved professionals.
11 U.S.C. § 507(a)(2) generally ranks allowed administrative expenses second, above most unsecured claims.
Allowance is not automatic — an entity generally files a request under 11 U.S.C. § 503(a), and the court rules after notice and a hearing.
Local bankruptcy rules set the form and timing of these requests, and they differ from district to district.

If you have heard that trustees and lawyers "get paid first" in bankruptcy, this is the rule behind that phrase. Administrative expenses are the costs of running the case itself, and the Bankruptcy Code treats them differently from the credit card balances and medical bills that brought someone to file. Knowing what counts, and what does not, explains a lot about who actually receives money in a case.

What is an administrative expense, exactly?

An administrative expense is a cost of running the bankruptcy case itself, generally incurred after the case is filed rather than before it. 11 U.S.C. § 503(b)(1)(A) describes the core category: the actual, necessary costs and expenses of preserving the estate, including wages, salaries, and commissions for services rendered after the case begins. The same subsection reaches taxes incurred by the estate, and any fine or penalty relating to those taxes. 11 U.S.C. § 503(b)(2) adds compensation and reimbursement awarded to court-approved professionals, such as the trustee and any attorney or accountant employed by the trustee or the estate. 11 U.S.C. § 503(b)(3) covers certain creditor expenses, including those of a creditor who files an involuntary petition or who recovers, after court approval, property the debtor transferred or concealed. What ties the list together is benefit to the estate. These are the costs of administering a case, not the household debts that led to it.

Why does it matter in a bankruptcy case?

It matters because most bankruptcy estates do not have enough money to pay everyone, so the order of payment decides who receives anything at all. 11 U.S.C. § 507(a)(2) places administrative expenses allowed under 11 U.S.C. § 503(b) second in the statutory priority list, along with certain fees and charges assessed against the estate. That is ahead of general unsecured claims, which sit below every priority category. There is also a narrow carve-out at the top: under 11 U.S.C. § 507(a)(1)(C), where a trustee is appointed or elected, certain administrative expenses of the trustee are paid before domestic support obligation claims, to the extent the trustee administers assets that would otherwise be available to pay those claims. For a person filing, the practical effect is usually indirect. In a Chapter 13 case, allowed administrative expenses may be paid through distributions under a confirmed plan (Bankr. D. Haw. LBR 3001-2), which is money not flowing to other creditors.

How does an administrative expense actually get allowed and paid?

It is a request, not an automatic entitlement. Under 11 U.S.C. § 503(a), an entity may timely file a request for payment of an administrative expense, or may file late if the court permits it for cause. The court then allows administrative expenses after notice and a hearing under 11 U.S.C. § 503(b). Local rules fill in the mechanics, and they vary. In the Middle District of Florida, requests are made by application under M.D. Fla. LBR 3071-1. In the District of Maryland, requests must be served under D. Md. LBR 2070-1. South Dakota requires the application to identify the entity to be paid, state the statutory basis, and itemize the expense (Bankr. D.S.D. R. 2016-4). One exception runs the other way: under 11 U.S.C. § 503(b)(1)(D), a governmental unit need not file a request for the tax expenses described there. Because the details are district-specific, check the local rules for the court that governs your case.

A request is filed, notice goes out, and the court allows or denies the expense.
Districts set their own application forms, service requirements, and deadlines.
Some requests are handled through the trustee's distribution rather than a separate order (Bankr. D. Haw. LBR 3001-2).

What are the main exceptions or limits?

The statute itself carves things out. 11 U.S.C. § 503(b) expressly excludes claims allowed under 11 U.S.C. § 502(f), which instead receive their own third-place ranking under 11 U.S.C. § 507(a)(3). Certain back pay awarded after a case begins is allowable under 11 U.S.C. § 503(b)(1)(A)(ii) only if the court makes specific findings, including that payment will not substantially increase the probability of layoffs or of nonpayment of domestic support obligations during the case. Administrative status can also be leapfrogged: under 11 U.S.C. § 364(c)(1), a court may authorize new credit with priority over any or all administrative expenses of the kind specified in 11 U.S.C. § 503(b). Timing is a limit too. A request filed after the deadline set by local rule may be denied administrative expense treatment (D. Mass. LBR 3002-1). And goods delivered to a debtor shortly before the case begins fall under 11 U.S.C. § 503(b)(9), which districts often govern by their own procedure.

How does this differ between Chapter 7 and Chapter 13?

The category is the same in both chapters; the money and the calendar are not. In a Chapter 7 case, allowed administrative expenses are generally paid from whatever assets the trustee collects and liquidates. Where a case is a no-asset case, there is nothing to distribute, and the priority ranking never comes into play. In a Chapter 13 case, the trustee generally pays allowed administrative expenses through distributions under a confirmed plan (Bankr. D. Haw. LBR 3001-2), so they are funded by the debtor's plan payments over time. Deadlines follow the same split. Local rules commonly tie the Chapter 7 deadline to the claims bar date or to the completion of estate administration, and tie the Chapter 11, 12, and 13 deadline to the plan confirmation hearing (M.D. Fla. LBR 3071-1; AK LBR 2016-3). The exact deadlines are set district by district.

Administrative expenses: Chapter 7 compared with Chapter 13
Question	Chapter 7	Chapter 13
Where does payment come from?	Assets the trustee collects and liquidates	Distributions under a confirmed plan
What if there is nothing to distribute?	Allowed expenses commonly go unpaid from the estate	Plan payments are the funding source, so the question arises differently
When is a request commonly due?	Often tied to the claims bar date or the close of estate administration	Often tied to the plan confirmation hearing
Who typically requests one?	Trustee, estate professionals, certain creditors	Trustee, estate professionals, certain creditors

What do people most commonly get wrong about administrative expenses?

The most frequent mix-up is between court fees paid at filing and administrative expenses of the estate. They are separate things: a Chapter 7 case carries a $245 statutory filing fee (28 U.S.C. § 1930(a)(1)(A), (f)(1)), a $78 administrative fee (Bankruptcy Court Miscellaneous Fee Schedule, Item 8, effective December 1, 2023), and a $15 trustee surcharge (Bankruptcy Court Miscellaneous Fee Schedule, Item 9, effective December 1, 2023). A Chapter 13 case carries a $235 filing fee (28 U.S.C. § 1930(a)(1)(B)) and a $78 administrative fee (Bankruptcy Court Miscellaneous Fee Schedule, Item 8, effective December 1, 2023). The second mistake is reading "second priority" as "paid before everyone." The priority list in 11 U.S.C. § 507(a) orders unsecured claims; it is not a rule about secured creditors' collateral. The third is assuming allowance is automatic. Under 11 U.S.C. § 503(a) and (b), someone generally has to ask, and a court has to allow it after notice and a hearing.

Filing and administrative fees paid to the clerk are not the same as administrative expenses of the estate.
Priority under 11 U.S.C. § 507(a) orders unsecured claims, not secured creditors' rights in collateral.
Administrative status generally requires a request and a court order, and late requests can be denied.

Frequently asked questions

Do administrative expenses come out of my pocket?: Not directly in a Chapter 7 case, where allowed administrative expenses are generally paid from estate assets the trustee collects. In a Chapter 13 case, the trustee may pay them through distributions under a confirmed plan (Bankr. D. Haw. LBR 3001-2), which is funded by plan payments. Court filing and administrative fees are separate and are paid to the clerk.
Are trustee and attorney fees really paid first?: They rank high, but "first" is imprecise. Compensation and reimbursement awarded to court-approved professionals is an administrative expense under 11 U.S.C. § 503(b)(2), and 11 U.S.C. § 507(a)(2) generally places allowed administrative expenses second among unsecured claims. A narrow trustee carve-out in 11 U.S.C. § 507(a)(1)(C) can come ahead of domestic support obligation claims in defined circumstances.
What is a section 503(b) claim?: It is a request for payment of an administrative expense allowed under 11 U.S.C. § 503(b). An entity files a request under 11 U.S.C. § 503(a), and the court allows the expense after notice and a hearing. Districts set the form and timing by local rule, such as M.D. Fla. LBR 3071-1 and Bankr. D.S.D. R. 2016-4, which requires itemization and a statement of the statutory basis.
Can an administrative expense be denied?: Yes. The court decides allowance after notice and a hearing under 11 U.S.C. § 503(b), and a request filed after a local deadline may be denied administrative expense treatment (D. Mass. LBR 3002-1). Certain back pay is allowable only if the court makes the findings described in 11 U.S.C. § 503(b)(1)(A)(ii). Denial does not necessarily end the matter, since local rules may preserve other claim rights.
Does state law change what counts as an administrative expense?: No. This category is federal, defined by 11 U.S.C. § 503 and ranked by 11 U.S.C. § 507(a)(2), so it does not change from state to state. What does change is local procedure — the application form, service requirements, and deadlines set by each bankruptcy court's local rules. Find the court that governs your case to see which local rules apply.
Can anything be paid ahead of administrative expenses?: Yes, in defined situations. Under 11 U.S.C. § 364(c)(1), a court may authorize the trustee to obtain credit with priority over any or all administrative expenses of the kind specified in 11 U.S.C. § 503(b). And 11 U.S.C. § 507(a)(1)(C) places certain trustee administrative expenses ahead of domestic support obligation claims, to the extent the trustee administers assets otherwise available for those claims.

Sources

11 U.S.C. § 503 — Allowance of administrative expenses
11 U.S.C. § 507 — Priorities · official source
11 U.S.C. § 364 — Obtaining credit
11 U.S.C. § 502 — Allowance of claims or interests · official source
M.D. Fla. LBR 3071-1 — Applications for Administrative Expenses
Bankr. D. Haw. LBR 3001-2 — Requests to Pay Administrative Expenses
Bankr. D.S.D. R. 2016-4 — Administrative Expense other than for Estate Professional
D. Md. LBR 2070-1 — Administrative Expenses
D. Mass. LBR 3002-1 — Deadline for Filing Requests for Allowance of Administrative Expenses Pursuant to 11 U.S.C. § 503(b)(9)
AK LBR 2016-3 — General Administrative Expenses
28 U.S.C. § 1930(a)(1)(A), (f)(1)
28 U.S.C. § 1930(a)(1)(B)
Bankruptcy Court Miscellaneous Fee Schedule, Item 8
Bankruptcy Court Miscellaneous Fee Schedule, Item 9

By Antonio G. Jimenez, Esq. · Florida Bar No. 21022

Sources verified July 27, 2026 · How we verify

Every figure on this page is drawn from a primary legal source and checked against our canonical legal database before publication. Bankruptcy.law is not a law firm and does not provide legal advice.

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